[Updated RFP] Korea Post seeks two global debt fund houses for $170 mn mandate

(On August 25, Korea Post extended the deadline for submitting proposals for its global debt investment mandate to August 31, 2020 from August 19, 2020. No other change to the text below.)

Korea Post’s insurance arm is planning to invest around 200 billion won ($170 million) in emerging markets corporate debt and US corporate debt and will select two management companies for each strategy, according to its official and the request for proposal on August 7.

It will receive proposals in Korean via its foreign debt investment advisor Shinhan BNP Paribas Asset Management by August 31 at 6 p.m. (Seoul time). It plans to finalize the selection in October.

Korea Post added that the second stage of evaluations will be conducted in Korean.

For the planned investment that will take place in a gradual manner, Korea Post may open a managed account via Shinhan BNP, or commit capital to a global blind-pool fund managed by the selected asset manager.

The proposing manager must have a minimum of three years of track records in the proposed strategy, with a minimum $500 million in assets under management, or $200 million AUM of emerging market corporate debts.

Including the proposed offshore fund, it also must have a minimum $1 billion AUM as of the end of June 2020, with a total fixed income assets of a minimum $5 billion under management.

It declined to provide its target yields for the new mandates. On August 7, the benchmark yields on emerging markets corporate debt and US corporate debt are 3.05% and 1.75%, respectively.

Separately, the insurance unit is planning to allocate $200 million to one or two real estate mezzanine debt managers for a target net internal rate of return of 6-8%.

By Sang-eun Lucia Lee

selee@hankyung.com