Korea construction crews’ fund gives $70 mn mandates to Park Square, Goldman

  • 2017-05-01

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.

To shore up investment returns which were one of the lowest among major South Korean savings funds in 2016, CWMAA is pushing into alternative investments and diversifying portfolios.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>