TIAA, Korean Teachers’ Credit to form 3rd JV with $510 mn capital

The Teachers Insurance and Annuity Association of America (TIAA) and the Korean Teachers’ Credit Union (KTCU) have reached a preliminary agreement to launch a third joint venture with a capital of $510 million to further expand co-investments.

Under the memorandum of understanding signed on July 8, TIAA and KTCU will commit $260 million and $250 million respectively to the JV, KTCU said in a statement.

The two retirement funds will also seek to cooperate in alternative investment in accordance with environmental, social and governance principles.

Previously, they had formed $1 billion JVs which invested in US commercial real estate debts since 2017.

“Now that our co-investments in two rounds have been completed, we will establish a third joint venture. We will cement our relationships which began in 2012 and cooperate aggressively to explore various investment opportunities going forward,” KTCU chairman Sung-soo Cha was quoted as saying in the statement.

It was not immediately known where the third JV will focus on.

TIAA manages more than $1 trillion in assets for over 5 million subscribers, while KTCU has $25 billion under management.

South Korean pension funds have been joining hands with the US counterparts to source investments in the competitive market for alternative investing and learn their management knowhow.

In 2018, the Public Officials Benefit Association (POBA) launched $400 million JVs with the California State Teachers’ Retirement System (CalSTRS) and the Teacher Retirement System of Texas (TRS) respectively to invest in US real estate debts.

The $11 billion pension scheme for South Korea’s local government employees will double co-investment with CalSTRS to 880 billion won and is in discussion with TRS to increase co-investment, a POBA source said in April.

By Hyunil Lee

hiuneal@hankyung.com