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Alternative investments

NPS adds KKR, two global alternatives managers in Q3

Nov 26, 2020 (Gmt+09:00)


NPS adds KKR, two global alternatives managers in Q3
The National Pension Service has added KKR and Sydney-based Scape Australia Management to its pool of 54 global real estate investment managers in the third quarter of this year, according to its quarterly report on overseas alternative management firms on Nov. 26. 

For private equity investment, it added New York-based Madison Capital to its group of 62 managers.

In total, three firms were included in the pool of NPS' global alternatives managers, compared to six in the second quarter, including Allianz SE, Angelo Gordon and Starlight Investments for overseas real estate investments.

In July, KKR launched a $950 million real estate credit fund to invest in commercial mortgage-backed securities (CMBS). The New York-based investment firm has also raised $1.5 billion for its first Asia-focused real estate fund in its first close.

Scape Australia Management is Australia’s largest student accommodation provider. NPS made a 50:50 investment in student housing facilities in Australia with Dutch pension fund manager APG in August. NPS, with 790 trillion won ($713 billion) in assets, reportedly has invested $300 million in a fund managed by Scape Australia.

Madison Capital, with $5.6 billion of assets under management, is a real estate private equity firm focused on debt and equity investment strategies. It has recently raised a $1 billion real estate credit fund to target value-add and core-plus real estate transactions.

Including the three new management firms, NPS has mandated 159 companies for overseas alternative investments: 62 PEFs, seven hedge fund houses, 54 real estate investment firms and 36 infrastructure investment houses.

This year, the world’s No. 3 pension scheme has boosted alternative investments by a net 7 trillion won to a total of 91.7 trillion won as of the end of August, of which 70% represents overseas investments.

It plans to deploy an additional 8.3 trillion won to alternatives for the remainder of this year.

This year, NPS formed a strategic alliance with APG, through which they also invested in Portugal’s largest toll road operator in October.

NPS also invested in a redevelopment project for One Madison Avenue, a residential condominium tower, in Manhattan, led by Hines Interest LP.

NPS plans to expand alternative investments to 15% of its total assets by the end of 2025 from the current 11-12% level.

Write to Jung-hwan Hwang at jung@hankyung.com

Yeonhee Kim edited this article.

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