Samsung, Korea Post create $336 mn overseas alternative investment fund

South Korea's largest insurance company Samsung Life Insurance Co. and state-run postal savings and insurance agency Korea Post’s insurance arm signed a memorandum of understanding on Nov. 22 to set up an overseas investment fund with a combined worth of 400 billion won ($336.4 million). Samsung Life has committed 210 billion won while Korea Post and Samsung Asset Management Co. have committed 180 billion won and 10 billion won, respectively, an official from Samsung Life told The Korea Economic Daily.

The fund, dubbed Samsung Co-Investment 2021 General Private Investment Trust I, will be used for investments in overseas blue chip companies for the next 10 years.

For multiple co-investments through the fund, the two parties will tap into their global private equity investment networks based on their previous investments, the Samsung official said. Samsung Life and Korea Post have invested in various global blind pool funds, and the private equity investment firms that managed the blind pools offered the two parties this co-investment opportunity. The official added that the PE firms will select the overseas blue chip companies, focusing on alternative investments in North America and Europe. 

In addition, Samsung Life and Korea Post will collaborate in the diversification of their overseas alternative investment portfolios and look to increase their asset management returns. Also, the two parties will partner in insurance business areas such as insurance products and risk management, Samsung Life said.

Samsung Life, with 247 trillion won assets under management as of the end of June of this year, increased its alternative asset proportion from 8.9% in 2018 to 10.1% at end-June. The company is planning to ramp up the alternative investment proportion to 15%. Korea Post, with assets under management of 136.8 trillion won as of end-June, is the second-largest pension fund in Korea. The insurance savings arm invests 10.2% of its AUM in alternative investments. 

Write to Chang-Jae Yoo at yoocool@hankyung.com
Jihyun Kim edited this article.