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RFP

Korea Post seeks two direct lending funds for $200 mn mandates

By Dec 08, 2020 (Gmt+09:00)

Korea Post seeks two direct lending funds for 0 mn mandates
Korea Post’s savings arm plans to select two global direct lending funds focusing on North America and Europe and commit $100 million to each of them, according to its request for proposal released last week.

The state agency will receive proposals for the mandate in both Korean and English by Dec. 15 at 6 p.m. (Korean standard time) through brokerage firms registered in Korea. The final selection is due for February of next year.

Qualified candidates must have experience of managing a commingled direct lending fund and have at least $500 million in a fund that allocates at least 80% of its committed capital to senior debt, including unitranche debt.

Korea Post will exclude private debt funds targeting certain sectors such as real estate, infrastructure and energy, as well as hedge funds, collateralized loan obligation funds and business development companies, which tend to lend to startups and growth companies.

It will pay management fees of around 2% of the committed or invested amount for a planned investment period of four years, as well as performance fees of up to 15% of returns if the investment returns exceed the hurdle rate of 5%.

In the first-round screening, Korea Post will focus on the accumulated AUM, AUM per manager and returns of fund houses, as well as risk management factors such as loss and debt ratios, leverage multiple and covenants. In the second round, investment strategies such as deal-sourcing networks and differentiation plans will be top considerations.

Last year, its insurance arm committed a combined $200 million to two unidentified global private debt managers for direct lending.

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

Yeonhee Kim edited this article.

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