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Alternative investments

POBA commits $150 mn to Brookfield secondaries fund

POBA ventures into real estate secondaries market for a target net IRR of 12%

Jul 28, 2021 (Gmt+09:00)

POBA commits 0 mn to Brookfield secondaries fund
South Korea's Public Officials Benefit Association (POBA) has ventured into the real estate secondaries market, committing $150 million to Brookfield Asset Management's new fund, according to a local media report. 

The real estate fund, launched last year, targets secondary deals in the real estate market for private assets across Europe, North America and Australia, the Financial News reported last week. 

It makes either direct investments in target assets, or takes a stake in a portfolio of real estate, from their existing investors. It focuses on multifamily residential, senior housing, logistics and self-storage facilities that provide space to rent and store individuals' belongings, as well as office buildings.

The secondaries fund targets a 12% net internal rate of return (IRR) for an investment period of 10 years which can be extended by up to three years.

The capital commitment to Brookfield, one of the world's largest real estate investors, is expected to provide POBA with co-investment opportunities together with the Toronto-based alternative asset manager and other global institutions, the daily added.

POBA participated in the fund through Samsung SRA Asset Management on expectations that secondaries transactions would reduce the J-curve effect in its portfolio, or negative returns in the first years of investment before turning higher.  

Brookfield's first transaction for the secondaries strategy was the purchase of an interest in a multifamily residential project in Los Angeles, according to a Bloomberg report in November last year.  

Yeonhee Kim edited this article.

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