Korea Post to tap two GPs for global PE secondaries

Korea Post, South Korea's state-run postal service agency, said on April 6 its savings arm will choose two asset managers for two closed-end commingled blind pool funds. The savings bureau will inject up to $200 million in the funds aimed at raising a combined $1 billion or more.  

The secondary funds will be used for global private equity investment, and at least 50% of the funds will focus on developed countries in North America and Western Europe. It won’t invest in private equity funds focusing on specific sectors, such as real estate, infrastructure and energy. The funds will terminate 10 years from the final closing, with an extension of up to four years. The investment period will be five years from the final closing, with extensions of up to two years.

For applications, asset managers should submit historical records of secondary commingled private equity funds with vintages before 2008, or the global financial crisis. Once selected, they also have to commit at least 1% of the total limited partners' commitments to the funds, according to Korea Post's announcement.

Korea Post will receive applications by April 20 and undertake some qualitative and quantitative assessments, due diligence and the investment committee’s discussions for approval. The postal agency will announce the two GPs in August.

The postal savings bureau manages 85 trillion won ($69.7 billion) in assets as of end-2021, of which alternative investments make up 8.2%. The savings arm targets a 7% return from alternative investment, according to The Korea Economic Daily's Asset owners report. 

The postal service basically has been pursuing low-risk and low-return investments for stable fund operations. But it will gradually increase mid-risk and moderate return in response to the post-pandemic era, said Korea Post's President Son Seung-hyun in an interview with The Korea Economic Daily in February. 

Korea Post plans to increase overseas real assets to hedge against inflation this year, and is particularly looking for data centers and logistics centers in developed countries, Son said during the interview.

Write to Tae-Ho Lee at thlee@hankyung.com
Jihyun Kim edited this article.