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Alternative investments

GEPS earmarks $135 mn for first global infra investment

Feb 22, 2021 (Gmt+09:00)

(Source: Getty Images Bank)
(Source: Getty Images Bank)

South Korea's Government Employees Pension Service (GEPS) is planning to commit a combined 150 billion won ($135 million) to three global infrastructure funds this year, in its first investment in overseas infrastructure assets, according to a local media report.

For the investment mandate, it will release its request for proposals at the end of next month and commit 50 billion won each to three funds, the Bell reported, citing the investment banking industry last week.

When asked about the report, GEPS told Market Insight of The Korea Economic Daily that nothing has yet been determined on its overseas infrastructure investment.

Apart from the planned commitments to blind-pool infrastructure funds, GEPS will participate directly in overseas infrastructure projects from the second half of this year to raise exposure to overseas and alternative assets, the report said.

The pension fund will also bump up investments in venture capital funds to 80 billion won, compared with last year’s commitment of a combined 60 billion won to three VC firms.

In 2021, GEPS plans to boost alternative investments by 9% to 2.06 trillion won, including new allocations of around 300 billion won, compared with last year. It has maintained alternative assets in the 20% range of its total financial assets for the past few years.

It is targeting a 4.1% return on average from investments this year. 

GEPS manages 8.2 trillion won as of the end of last year, which breaks down into fixed income at 3.22 trillion won; equities at 2.75 trillion won; alternatives at 1.9 trillion won; and reserves at 350 billion won.

Last year, it garnered an 880.1 billion won profit from financial investments, breaking the previous record of 775.9 billion won set in 2019 when its investment returns averaged 8.1%. It has not released further details about last year’s investment performance.

Meanwhile, the Korean Teachers’ Credit Union (KTCU) and financial services firms in South Korea have committed $130 million to KKR & Co.’s inaugural Asia infrastructure fund that raised $3.9 billion in its final close earlier this year.

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

Yeonhee Kim edited this article.

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