Korea SWF appoints Partners Group for RE mandate

The Korea Investment Corporation has appointed Swiss-based alternatives firm Partners Group to help it invest in private real estate strategies

Korea Investment Corporation (KIC), the $30 billion sovereign wealth fund created by Korea’s Government five years ago, has picked Switzerland’s Partners Group to help it make private real estate investments.

The Korea Investment Corporation was established on July 1 2005 and only started investing in alternative assets in 2009, making it a new entrant to private equity real estate investing. Partners Group  has already been awarded a mandate to invest in private equity secondaries having been appointed last year.

In a statement, managing director of the fund’s private markets group, Dong-Ik Lee, said that it was “excited” about the outlook for profitable (real estate) investments, singling out restructuring and recapitalisations as two areas of special interest.

Zug-based alternatives investment firm, Partners Group, said it believed KIC could profit from providing financing to property investors in need of repairing the balance sheets of their investments.

Nori Gerardo Lietz, partner and chief strategist for private real estate, added it could take advantage of “numerous opportunities” and that recapitalisations were currently one of the most attractive opportunities in private real estate, particularly in developed markets. “We expect these opportunities to remain available for a period of time going forward,” she said.

As of December 31 2009, KIC has assets of $30 billion under management, which made an annual return last year of 17.5 percent.

It classifies private equity, hedge fund, strategic investments, commodities and real estate under the alternative asset class.

According to its latest annual report, real estate and commodities account for 2 percent of total assets currently, equal to less than $600 million of real estate investments currently. 

The annual report states that in 2009 it pursued investments in distressed debt, secondary private equity and opportunistic real estate strategies which, it said, are expected to deliver stable long-term returns.