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Alternative investments

GCM Grosvenor wins POBA's $300 mn infra SMA mandate

The separate account targets a net IRR of 6-8% from private infrastructure investments

Jul 19, 2021 (Gmt+09:00)

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Getty Images Bank

South Korea's Public Officials Benefit Association (POBA) has recently picked GCM Grosvenor, a US alternative investor, as its new separate account manager to invest $300 million in private infrastructure, according to a local newspaper report.

The separately managed account (SMA) will target privately owned or unlisted infrastructure in North America, Europe, Australia and Asia with an investment period of 13 years, which can be extended by two years, the Financial News reported last week.

The SMA, to be launched as early as September, targets a net internal rate of return of 6-8%, or an IRR after the deduction of management and performance fees, the daily added.

It marked the first time for the Chicago-based alternative investment firm to manage assets on behalf of the POBA, after winning mandates from the National Pension Service (NPS) and the Korea Investment Corp., South Korea's two top asset owners.

Back in 2016, GCM Grosvenor was picked as one of the two funds of hedge fund managers by the NPS, along with BlackRock Alternative Advisors. They had received $500 million in commitments from the world's third-largest pension scheme, respectively. 

GCM Grosvenor manages approximately $65 billion in assets across private equity, infrastructure, real estate, credit, and absolute return strategies.

This year, POBA has been putting efforts into expanding SMA and co-investment platforms to speed up capital deployment and gain more control of investments, while further increasing exposure to real estate and infrastructure.

It has recently opened a $300 million SMA managed by Kyobo AXA Investment Managers Co., a Korean joint venture between the French insurance group AXA and South Korea's Kyobo Life Insurance Co., to diversify its real estate portfolio into logistics and data centers.

Last month, POBA re-upped its four-year-old SMA, run by CBRE Global Investors and Seoul-based IGIS Asset Management Co., with a commitment of 270 billion won. It targets life science buildings, last-mile distribution centers and student housing facilities in Europe.

Previously, the $15 billion pension fund for South Korean provincial government employees had set up joint ventures with California State Teachers’ Retirement System (CalSTRS) and Denmark’s PFA to co-invest in overseas properties.

Yeonhee Kim edited this article.

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