MetLife’s real estate debt fund attracts $80 mn from two Korean savings funds

The Public Officials Benefit Association and the Korea Scientists and Engineers Mutual-aid Association have decided to invest $50 million and $30 million respectively to a $900 million US real estate debt fund run by MetLife Investment Management, according to one of the associations on April 2.

The open-ended fund was launched in the fourth quarter of 2015 to provide senior real estate loans for annual interest rates of 5 to 6%. The loans are secured by office buildings, hotels, logistics centers and other properties in core locations in the US.

MetLife’s life insurance unit has committed its own capital to the fund, accounting for about half of the senior debt fund. The company is understood to have been highly involved in executing investments for the fund.

“The fund also has high liquidity because we can cash out within three months after making a redemption request,” said the source.

In the past one and a half years since the fund launch, it has already executed investments for over $500 million.

South Korean institutional investors are scaling up their exposure to overseas private debt funds in search of steady cashflows and low-risk investments, while slowing down investments in cross-border real estate amid concerns about high valuations and interest rate rises.

By Donghun Lee