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RFP

POBA seeks new global REIT manager for $100 mn mandate

Dec 07, 2020 (Gmt+09:00)

POBA CIO Dong-hun Jang during an interview with the Korea Economic Daily, Feb 2019
POBA CIO Dong-hun Jang during an interview with the Korea Economic Daily, Feb 2019

South Korea’s Public Officials Benefit Association (POBA) will select a new global real estate investment trust (REIT) management firm to invest $100 million in listed overseas REITs, or shares in listed real estate companies, according to its request for proposal issued on Dec. 7.

The pension fund for provincial government employees will receive proposals for the new mandate in Korean by Dec. 23 at 4 p.m. (Korean standard time). It plans to finalize the selection by the end of next month.

The investment through a separately managed account will target major markets, including the US, Europe, UK and Japan, while benchmarking the FTSE EPRA Nareit Developed Index, designed to track the performance of listed REITs and real estate companies worldwide.

Qualified candidates must have been managing global REIT portfolios in foreign countries and run an office in South Korea for regular monitoring and communication with POBA. They should not be included in POBA’s existing pool of global REITs managers.  

For an investment period of 10 years, POBA will deploy the capital in installments and may increase its allocation, depending on market conditions and performance.

As for performance fees, POBA will pay 15% of returns for the investment returns that exceed 8%.

In the first round of screening, POBA will take a close look at the three-year performance and fee structure of the managers, followed by the AUM and total management period of their REITs. In the second-round selection, investment strategy and managers’ expertise will be the key criteria.

Write to Sang-eun Lucia Lee at selee@hankyung.com

Yeonhee Kim edited this article.

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