Australia’s IFM Investors opened its eighth global office in Seoul on Nov. 30, at a time when key South Korean asset owners stressed the importance of communications with global general partners to make long-term infrastructure and real estate investments.
The office launch, following its office opening in Hong Kong last year, is in response to growing presence of South Korean institutional investors in infrastructure markets not only in Australia but in other developed markets.
“More than ever, Korean pension and insurance investors are embracing IFM Investors investment model … in order to diversify globally and add to their risk adjusted returns,” Chief Executive Officer Brett Himbury was quoted as saying in a press release.
He picked new and renewable energy projects under long-term contracts as good targets for debt investors. For equity investment, he was upbeat about traffic and transportation networks, harbors and roads, adding that the key is whether the target asset is in a monopoly position.
Himbury recommended achieving economies of scale to secure better returns from infrastructure: pooling individual investors’ money in a fund to make large-scale, long-term investment.
With pension fund pools expanding in the rapidly aging country, other global asset managers, including Neuberger Berman, are rumored to be preparing to expand their presence in South Korea.
Their moves are in contrast to those of mutual fund houses such as JPMorgan, UBS and Goldman Sachs. The three investment banks have recently scaled back operations in South Korea because of poor sales of offshore equity and fixed-income funds.
For the time being, IFM Investors’ Seoul office will concentrate on communications with existing clients. Kelly Ki Jeong Lee, a former Samsung Life Insurance’s IR team head, was appointed a Client Relationship Director to lead the Seoul office.
In October, deputy director of Korea Post’s insurance bureau, Sehoon Park, suggested that global GPs set up an office in South Korea and have a staff based in the country to make continuous cooperation and post-investment management of real estate and infrastructure investment.
Since last year, the Australian infrastructure investment firm had teamed up with South Korean companies to set up investment funds in the country.
Samsung Asset Management Co. Ltd. had launched a $500 million blind-pool fund to invest in infrastructure-backed debt, for joint management with IFM Investors.
In November 2016, IFM Investors and South Korea’s KDB KIAMCO, the infrastructure-investing arm of a state-run bank, jointly raised a $150 million global infrastructure debt fund. Major South Korean insurance companies, including Nonghyup Life Insurane Co. Ltd., Mirae Asset Life Insurance Co. Ltd. and Dongbu Insurance Co. Ltd., had participated in the fund.
IFM Investors, owned by 28 pension funds, managed A$98 billion in assets at end-September 2017, serving 262 institutional clients across 14 countries.
It is also reportedly looking for investment opportunities in Japan’s asset privatization drive and China’s $124billion modern-day Silk Road project.
By Daehun Kim
<Edited by Yeonhee Kim>