Koramco to open office next to NPS for property investment partnership
Byeong-Hwa Ryu
4 HOURS AGO
NPS Investment Management’s headquarters in Jeonju, North Jeolla Province (File photo) Koramco Asset Management Co. will open a liaison office next to South Korea’s National Pension Service (NPS) to strengthen cooperation with the world’s third-largest pension fund, which is increasing its investment in real estate.
The Seoul-based asset manager focusing on real estate and infrastructure plans to launch a liaison office a five-minute walk from NPS Investment Management’s headquarters in Jeonju, 240 kilometers (150 miles) south of the South Korean capital, according to investment banking industry sources on Friday.
Koramco is the first South Korean asset manager to open a liaison office in the capital of North Jeolla Province, while foreign investment companies have been operating such offices there.
Global private equity giant Blackstone Inc. asset managers such as Franklin Templeton and BNY Asset Management, as well as major real estate investment managers including Hines and Tishman Speyer have liaison offices in the city. Among custodian banks, BNY Mellon and State Street opened such offices there.
LONGSTANDING COOPERATION
Koramco has been in partnership with NPS for a long time. The pension fund injected 787 billion won ($574.4 million) into a real estate investment trust (REIT) established by the asset manager’s parent Koramco REITs Management and Trust Co. in 2006.
The REIT has provided annual returns of 5-8% to NPS for 18 years since its launch, helping the pension fund to collect 1.7 trillion won, more than double its investment.
The REIT generated stable profits by investing in and selling four residential and office buildings in Seoul. One of the buildings, in which Koramco’s headquarters is located, was sold to Singapore’s CapitaLand Investment Ltd. for 440 billion won.
Koramco attracted more money from NPS. The country’s largest institutional investor provided 250 billion won to the renovation of a building in Seoul, which Koramco bought earlier this year, in the pension fund’s move to resume its investments in real estate.
The asset manager was shortlisted along with Kyobo AIM Asset Management Co. and Hana Alternative Asset Management Co. for NPS’ real estate debt fund investment project worth 600 billion won.
Koramco rapidly expanded its business while its competitors struggled to manage their assets damaged by interest rate hikes.