The Public Officials Benefit Association (POBA) has committed an aggregate $150 million to Antares Capital, Golub Capital and Ares Management as the three US investment firms are raising funds to provide secured loans to US middle market, private equity-backed companies.
POBA will commit $70 million to Chicago-based credit manager Antares and $40 million to Ares and Golub each, according to the South Korea retirement fund with $10 billion in assets.
“With an aim to secure a steady stream of interest incomes on a yearly basis, we picked top-tier US credit managers of middle-market businesses,” Yonhap Infomax quoted an unnamed POBA source as saying last week. “We looked abroad in search of higher yield.”
POBA targets an annual return of 7 to 9% from the private debt funds for an investment period of seven to nine years, according to the report.
Including POBA’s commitment, Golub has raised over $100 million from South Korean institutional investors for its new fund, including the commitments from the Korea Scientists and Engineers Mutual-aid Association (SEMA) and brokerage firm Shinhan Investment Corp.
Golub has pulled in $2.52 billion for the latest fund that will focus on senior secured debts for a target net return of 10 to 13%, according to a report from the Private Debt Investor, a publication, earlier this month.
Separately, Ares had already collected $30 million from SEMA late last year for the private debt fund to which POBA just committed.
In 2018, POBA will increase fixed-income alternative investments in expectation of interest rate rises, its Chief Executive Officer Sang-soo Yoo told reporters last week.
By Daehun Kim