NPS adds Warburg Pincus as real estate asset manager in Q3

The National Pension Service added New York-based private equity firm Warburg Pincus LLC to its pool of 58 global real estate investment managers in the third quarter of this year, the South Korean pension fund’s quarterly report on overseas alternative management firms said on Nov. 29.

Founded in 1966, Warburg Pincus manages more than $67 billion in global assets. The New York-based investment manager is one of the leading investors in Asian real estate, and its partnerships with world-renowned companies include Singapore-based ARA Asset Management Ltd., Vietnam-based BW Industrial Development JSC, Shanghai-based real estate company Mofang and Singapore-headquartered internet company Princeton Digital Group.

Warburg Pincus has raised $37.6 billion from Korean institutional investors over the past five years as of February, according to private market-focused media Private Equity International and Visual Capitalist.

In March of this year, Korea’s Samsung Securities Co. reportedly participated in a $1.5 billion Warburg Pincus Asia Real Estate fund, the US firm’s first Asian real estate fund, as a placement agent. In Dec. 2020, ESR Kendall Square real estate investment trust (REIT), a Korean subsidiary of Warburg Pincus-backed APAC logistics real estate platform ESR Cayman Ltd., was listed on the Kospi main bourse with a market capitalization of $650 million and a total asset value of $1.3 billion.

In 2017, a pool of Korean pension and retirement funds invested around 85 billion won ($71.9 million) debt in Warburg Pincus-backed, five-star hotel Sofitel Legend Metropole Hanoi. The debt was secured on Warburg Pincus’ equity stake in the hotel after the US private equity firm acquired a 50% of stake in the hotel from asset management firm VinaCapital for $100 million in the same year.   

NPS’ real estate investment amounts to 34.7 trillion won, 34.5% of its alternative assets, as of end-2020. Its overseas real estate accounts for 79.7% of the real estate portfolio. Investment in North America, Europe and Asia-Pacific take 41.7%, 20.9% and 22.7% of its overseas real estate portfolio, respectively.

With 918.7 trillion won of total assets under management as of the end of the third quarter, NPS plans to increase its alternative investment proportion from 10.9% as of end-September to 16% by 2025.

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