Korean Presbyterian pension to tap GPs for alternative assets, equity

Pension Foundation of Presbyterian Church of Korea (PCK Pension), a South Korean retirement plan for pastors and churches, is poised to hire several investment firms to manage 50 billion won ($34.9 million) in alternative assets and equities.

PCK Pension, managing 600 billion won in assets with 17,000 members as of end-July, announced on Wednesday it will receive applications for the managers by Oct. 19. The pension scheme will hold a presentation meeting on Nov. 7 and select asset management firms by the end of the month.

The alternative investment targets include Korean and overseas private equities, real estate and infrastructure such as airlifts, ships, power plants, toll roads and ports.

The pension didn’t specify the number of asset managers and the commitment value allotted to each manager. Each manager can apply with one fund and relevant documentation written in Korean.

To apply, the asset managers should be financial investment firms operating under Korea’s Financial Investment Services and Capital Markets Act or have branches under such law. There is no limitation on countries where the investment firms' headquarters are based, a PCK Pension official said.

The firm needs to have been operating for more than three years at the time of application. Otherwise, the chief portfolio manager must have at least 10 years' experience in the relevant role. 

Alternative asset managers can apply with a blind pool fund of more than 100 billion won, which has received commitments of more than 30% of the total fund size, or with a track record of more than 300 billion won in private equity management since the inception of the firm.

To apply with a project-based alternative investment fund, the fund should be 50 billion won or larger with commitments of more than 40% of its total size. If not, the asset manager needs to have a track record of more than 150 billion won in private equity management since the inception of the firm.

Once hired, the asset managers should finish investment within five years of the fund's creation, with 10 years or shorter maturity for each fund. PCK Pension targets a 6-10% return on investment.

The last time the pension scheme hired investment firms was in 2020. PCK Pension committed 40 billion won in the first half of 2020, selecting Stonebridge Capital, a consortium of SKS Private Equity-Korea Investment Private Equity, LB Private Equity and IMM Investment.

During the second half of the year, the pension scheme committed 50 billion won to alternative investment with a selection of five asset managers, IMM Investment, JKL Partners, Atinum Investment, LB Investment and KB Investment.

Updated with the fund's assets under management

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.