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Private equity

Korea Post selects Ardian, Hamilton Lane for $100 mn co-investment

Each investment firm will manage up to $50 million, focusing on North America and Western Europe

By Dec 01, 2021 (Gmt+09:00)

Korea Post's head of alternative investment division Charles Lim speaks at  ASK 2021
Korea Post's head of alternative investment division Charles Lim speaks at  ASK 2021

Korea Post’s savings arm has selected French private equity firm Ardian SA and US alternative investment manager Hamilton Lane Advisors LLC to manage two overseas closed-end commingled funds. The combined worth of the two funds will be up to $100 million, with each investment firm in charge of up to $50 million. Korea Post will commit 10% or less of the target size of each fund.

At least 50% of each fund commitment will be allocated to developed countries in North America and Western Europe. Korea Post said the investment will exclude sector-focused funds that only invest in specific sectors such as real estate, infrastructure or energy. 

Korea Post has partnered with the two firms before. Its insurance arm selected Hamilton Lane and HarbourVest Partners to manage $100 million in 2017 and the savings arm chose Ardian and Lexington Investment Co. to manage $200 million in 2019.

Ardian has been active in partnering with Korea's institutional investors. In October of this year, Korea’s Construction Workers Mutual Aid Association (CWMA) said it will commit $25 million to Ardian for infrastructure investment. The $4 billion savings fund for CWMA awarded its infrastructure investment mandate to Ardian’s secondary fund of funds targeting a 12-15% internal rate of return.

In September, Ardian announced the launch of its new fund Hy24, which it said is the world’s largest hydrogen infrastructure investment platform. The French investment firm said Korea’s petrochemical company Lotte Chemical Corp. was an anchor investor of the new fund at the time. The French private equity firm has $120 billion in assets under management.

Founded in 1991, Hamilton Lane has $757 billion in assets under management and supervision as of end-June. The US firm garnered attention in Korea when Korea’s National Pension Service made its first overseas co-investment commitment of 400 billion won to its fund in 2014. 

Brent Burnett, managing director on the firm’s real assets team, said in The Korea Economic Daily’s alternative investment forum ASK 2020 that co-investment can hedge risk and deliver high profits amid the pandemic. He added that infrastructure is attractive as COVID-19 severely disrupted certain infrastructure assets, creating preferred equity and rescue financing opportunities for core transportation and strategic energy assets. 

Korea Post's postal savings arm has 86 trillion won in assets under management. It aims to increase the portion of its alternative assets from the current 8% to 10% by 2025, while focusing more on hedge funds than infrastructure assets for better liquidity. The savings arm's private debt and private equity assets take a combined 3% of the total assets, aiming for a 7% internal rate of return.

Write to Jihyun Kim at snowy@hankyung.com
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