Korea Post’s insurance unit is planning to commit about $100 million each to two multi-strategy global funds of funds (FoFs) employing primary, secondary and co-investment strategies, according to the state-owned agency.
It will receive proposals by 6:00 pm, April 17, 2017 (Korean time) through local distribution agents, and select two FoF managers by June, Korea Post said in a notice posted on its website last week.
Single-strategy hedge funds employing long/short or event-driven strategies will not be considered for the mandates.
Qualified general partners need to be currently managing a multi-strategy commingled fund of funds, or a multi-strategy separate managed account.
Korea Post targets a net internal rate of return (IRR) of 8% or above from the investment.
It wants the FoFs to employ primary strategy within 50 to 60% of committed capital; secondary within 20 to 30%; and co-investment within 20 to 30%.
For management fees, Korea Post suggests a maximum 1.0% of total committed capital during the investment period and a maximum 0.8% of the outstanding balance of the invested capital after the investment period.
If the IRR reaches or beats the targeted 8%, it would pay up to 10% of the performance as performance fees.
The request for proposal comes after the Korean Investors reported in early March that Korea Post’s insurance bureau was preparing to pick multi-strategy global FoF managers.
By Donghun Lee
<Edited by Yeonhee Kim>