Korea Post to hire two GPs for global infrastructure debt

 

Korea Post, South Korea's state-run postal service agency, said on April 14 that its insurance arm will select two asset managers for a maximum of $200 million in overseas infrastructure debt. The insurance arm will create two closed-end commingled blind pool funds, each with up to a $100 million commitment.  

At least 80% of each fund will be used for senior or junior loans in infrastructure based in developed countries of North America, Europe and Oceania. Korea Post is targeting a 4% or higher net internal rate of return (IRR) in Korean won and will commit up to 20% of the final commitment to each fund. 

For applications, the asset managers should prove more than $10 billion assets under management (AUM) in infrastructure and experience in infrastructure debt strategy, including separately managed accounts (SMAs), as of April 14. Co-GP proposals won’t be accepted. 

Korea Post will receive applications by May 2 and undertake qualitative and quantitative assessments, due diligence and incorporate the investment committee’s evaluations in their decision-making. It will announce the selected GPs in June. 

In 2020, Korea Post’s postal savings arm chose two New York-based investment firms, Argo Infrastructure Partners and Stonepeak Infrastructure Partners, for $200 million in overseas infrastructure investment. At least 70% of the funds will be used for equities in North America-based infrastructure assets, the postal service agency said at the time.  

In 2018, the insurance and savings arm jointly selected New York-based Global Infrastructure Partners and Toronto-based Brookfield Asset Management to invest $400 million in offshore infrastructure equities.  

Korea Post manages 146 trillion won in assets as of end-2021. The insurance arm’s AUM reaches 61 trillion won, and alternative investments make up 11.5%. The savings arm manages 85 trillion won in assets, of which alternative investments account for 8.2%. The postal service agency's target return from alternative investments is 6%.

Basically pursuing low-risk and low-return investment, Korea Post is planning to gradually increase its mid-risk and moderate returns in the post-pandemic era. The postal service agency will raise exposure to overseas real assets this year, with a particular focus on data centers and warehouses in developed countries, the agency's president Son Seung-hyun said during an interview with The Korea Economic Daily in February.

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