Pramerica, Rockspring land $400m Korea pension mandates

Parsippany-based Pramerica Real Estate Investors and London-based Rockspring Property Investment Managers become the latest beneficiaries of the National Pension Service of Korea’s desire to increase its exposure to alternative assets.

The National Pension Service of Korea (NPS) is to award $400 million separate account mandates to fund managers Pramerica Real Estate Investors (PREI) and Rockspring Property Investment Managers as it seeks to increase its exposure to real estate in Asia and Europe.

While none of the parties involved would comment on the matter, PERE understands the $270 billion pension fund is to finalise the appointments next week.

The mandates are part of NPS’ strategy to increase its exposure to alternative assets to approximately 10 percent, or $27 billion, by 2014. This represents a nearly threefold increase in its allocation to alternative assets, previously 3.8 percent, in 2008.

Within its current alternative assets allocation real estate accounts for about 2.5 percent of NPS’ total assets.

Andie Kang

The real estate division of Seoul-based NPS, led by senior portfolio manager Andie Kang (pictured), has previously worked with both PREI and Rockspring having invested in their European funds. Last year, NPS also appointed Rockspring to acquire central London assets as part of a wider strategy to purchase assets in London, New York, Tokyo and Sydney.

Both firms have been mandated to provide returns of 10 percent or more through their investments. They were victors in beauty parades that had final shortlists of three managers per region.

NPS, which has a real estate team of just four staff, has been reliant on external managers to help it realise its investing strategy. In addition to separate account mandates, the pension fund has also co-invested on an asset by asset basis through joint ventures.

Most recently, NPS acquired a 51 percent stake in the O’Parinor shopping centre in Aulnay-sous-Bois on the outskirt of Paris in a deal valued at €217 million. The deal was completed via its previous mandate with Rockspring, which PERE understands, has since been extended to include European investments. Prior to that, it purchased the Sony Center in Berlin for €570 million.

Its most recent and significant Asia acquisitions include the A$685 million (€436 million; $626 million) purchase of Sydney’s Aurora Place office building and the KDX Toyosu Grandsquare office for $362 million in partnership with New York-based The Carlyle Group.