Apollo Global, Cerberus win GEPS’ $160 mn private debt fund mandates

The Government Employees Pension Service (GEPS) has awarded overseas private debt fund mandates for opportunistic strategies to Apollo Global Management and Cerberus Capital Management to invest up to $160 million, according to the South Korean pension fund on March 24.

GEPS targets a double-digit internal rate of return a year from the strategies by investing in corporate loans and structured notes.

“There will be investment opportunities from changing market conditions and financial regulations,” said a GEPS source.

The mandates were announced a month after the pension scheme issued a request for proposals.

Since beginning capital allocation to overseas private debt funds in 2015, GEPS has been expanding the size of its commitment to private debt funds and adopting various strategies.

Last year GEPS committed $50 million each to Crescent Capital Group and HPS Investment Partners for mezzanine debt investments in North America. In 2015 it entrusted €30 million each to Ares Management L.P. and Alcentra Capital Corporation for senior debt investments in Europe.

Private debt funds are becoming a favorite alternative asset class for South Korean institutional investors pursuing a steady stream of cash incomes and quick redemption.

By Daehun Kim

daepun@hankyung.com