KTCU, CalSTRS to launch $505 mn JV for US warehouses

Korean Teachers’ Credit Union (KTCU), a retirement fund for South Korean teachers and employees, and The California State Teachers' Retirement System (CalSTRS) on March 31 signed an agreement to launch a joint venture with 612.2 billion won ($505.2 million) in capital. The two pension funds will invest in US-based logistics centers via the JV, KTCU said on April 4.

It is the first time that KTCU and CalSTRS have closed a partnership. The two pension funds are planning to expand collaborations in asset management and welfare support for their members. “We’ll use the JV as a basis for boosting our global partnerships with some large pension funds. Then, we'll intensify strategic partnerships with them for the long term,” KTCU’s Chief Executive Kim Sang-gon said.

CalSTRS is the second global pension fund partner with which KTCU has set up a JV. The Korean retirement fund and Teachers Insurance and Annuity Association of America (TIAA) established a $1 billion JV in 2014 and has jointly invested in US commercial real estate debt. After their first JV terminated at the end of 2016, KTCU and TIAA formed a second JV in January 2017 with $1 billion of capital for US real estate debt. In 2019, the two pension funds created a third JV with a capital of $510 million to further expand co-investments.  

KTCU manages 42.4 trillion won in assets as of end-2021. Last year, KTCU earned an 11.3% return from investment, which equals 4.4 trillion won. The return rate is the highest since 2009 when the fund gained a return of more than 30% just after the global financial crisis.  

The annualized return of 2021 was mainly backed by alternative investments. In June 2021, the Korean retirement fund realized a 74.2 billion won gain by selling part of its stake in K-pop group BTS’ music label HYBE Co., in which it invested 17.3 billion won in 2018. The fund also earned a combined 173 billion won from its eight-year investment of A$100.8 million ($76.7 million) in Aberdeen Asset Management’s first public-private partnership infrastructure fund.

Write to Chae-Yeon Kim at why29@hankyung.com
Jihyun Kim edited this article.