Golub and Ares win $60 mn private debt mandates from Korea scientists fund

Korea Scientists and Engineers Mutual-aid Association (SEMA) has decided to make its first allocation to global private debt funds by committing $30 million to each of Golub Capital and Ares Management, and is considering committing an additional capital to European private debt funds later this year, according to two local media reports.

SEMA, with 4.2 trillion won ($3.7 billion) in AUM, will deploy the capital to US-based credit asset manager Golub within the year and to Ares, the US alternative investment firm, early next year, Yonhap Infomax and Financial News reported on Sept. 13.

Both funds will finance private equity takeovers of US mid-market companies, as soaring private equity acquisitions and traditional banks’ retrenchment are increasing private debt demand.

With the new commitment from SEMA, Golub Capital is set to raise $70 million from South Korean investors for its new private debt fund which is expected to raise $2 billion. The Construction Workers Mutual Aid Association and Shinhan Investment Corp., a brokerage house, have recently decided to commit $20 million each to the fund.

Golub Capital’s new fund focuses on senior debt and is expected to deliver annual returns of 11 to 14%.

Ares primarily provides second-lien secured debt to fund acquisitions and targets 12 to 14% in annual returns for the debt fund.

Earlier this year, an insurance company source said that SEMA and two Korean insurance firms were strongly considering investing in a $2.5 billion private debt fund of Ares Management for making direct loans to mid to large-cap US companies.

daepun@hankyung.com