South Korea’s Construction Workers Mutual Aid Association (CWMAA) has selected Park Square Capital for 40 billion won ($35 million) private debt investment and picked Goldman Sachs to invest another 40 billion won in overseas real estate, in its first commitment to blind-pool funds for cross-border alternative investments.
As the $2.8 billion retirement fund aims to increase the share of alternative investments from 11% at end-2016 in its portfolios, it is planning to invest an undisclosed amount in an offshore infrastructure fund in the second half of this year, according to a CWMAA source on May 1.
For the overseas private debt fund mandate, UK-based Park Square Capital competed against Permira, a UK private equity firm. Goldman beat LaSalle Investment Management for the real estate mandate.
Park Square, a leading non-bank lender to private equity in Europe, has been raising a private debt fund to invest in senior debts of European companies. The fund has already attracted $90 million from three other South Korean institutions: $50 million from Korea Post; $20 million from Public Officials Benefit Association; and $20 million from Police Mutual Aid Association.
The real estate fund of Goldman Sachs, which CWMAA is to entrust 40 billion won to, employs value-added strategy by renovating buildings to pursue medium risk, medium returns.
CWMAA was established in 1998 to manage retirement savings for non-regular construction workers in South Korea. Its assets are projected to increase to 3.5 trillion won ($3 billion) by end-2017, according to the source.
By Daehun Kim
<Edited by Yeonhee Kim>