AMP Capital’s infrastructure fund raises $260 mn from Korean investors

  • 2017-05-12

South Korea’s police and scientist funds and insurers have committed $260 million to a global infrastructure fund of Australia’s AMP Capital which raised more than $2 billion to invest in subordinated debts collateralized by infrastructure assets.

KB Asset Management Co. Ltd. collected the money from Police Mutual Aid Association, Korea Scientists and Engineers Mutual-aid Association, as well as insurance firms in South Korea via three fund vehicles from February 2016 when infrastructure-focused AMP Capital launched the fund, according to sources involved in the fundraising on May 12.

The blind-pool infrastructure fund targets around 10% annual return for a reportedly 12-year investment period.

The South Korean insurers committing to the fund are Dongbu Insurance Co. Ltd., KB Insurance Co. Ltd., Kyobo Life Insurance Co. Ltd. and Mirae Asset Life Insurance Co. Ltd.

Initially, KB Asset raised $120 million last year through the first fund of funds (FoF), and an additional $60 million via the second FoF in April 2016.

The third FoF has recently raised $80 million, including $30 million from the Police Mutual Aid, and will close next week.

AMP will complete the fundraising this August, the sources added.

It is unknown which FoFs other South Korean institutional investors used to participate in the global infrastructure fund of AMP Capital.

AMP Capital had raised $2.4 billion for its global infrastructure platform at final close on Dec. 29, 2016, which includes the AMP Capital Global Infrastructure Fund, according to the company’s statement released last January.

Earlier this year, Public Officials Benefit Association committed 40 billion won to a separate infrastructure fund of AMP Capital targeting public service facilities in Australia.

Encouraged by loosened regulations on cross-border investments, domestic insurance firms are increasing their appetite for overseas infrastructure in search of long-duration assets.

Later this month South Korea’s financial regulators are preparing to submit to parliament revised bills aimed at lifting restrictions of insurance companies’ investment in foreign-currency assets and real estate, after they passed a cabinet meeting on May 2.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>