Neuberger Berman sees $100 mn fundraising in Korea to buy stakes in US asset firms

The Korean Teachers’ Credit Union (KTCU) will commit $50 million to a blind-pool fund that Neuberger Berman is in the process of raising, and other South Korean institutions may participate in the fund, as the U.S. private investment firm is seeking to raise a total of $100 million from the country.

Neuberger is aiming to raise billions of dollars from institutional investors around the world to launch a fund that buys equity stakes in U.S.-based asset managers, including hedge funds and private equity houses, according to investment banking sources on Oct. 16. Two to three other South Korean institutional investors are considering investing in the fund.

KTCU, which manages $18 billion of assets, expects the capital commitment to help broaden networks with U.S. asset management firms, as well as steady incomes.

South Korean pension and savings funds, latecomers to global alternative asset markets, are keen on building relationships with foreign asset managers to source attractive deals. Some of them started putting more weight on the potential for network building in selecting offshore fund managers.

“The PEF acts as a holding company of funds and employs buyout strategy of selling a company after restructuring and improving its value” an IB source told the Korea Economic Daily, referring to the new fund of Neuberger Berman.

KCTU’s Chief Investment Officer Sung-Seog Kang told the Korea Economic Daily in an interview in May that the savings fund was considering equity investments in holding companies of investment firms in a bid to learn management knowhow and build global network.

The fundraising comes after the U.S. private equity firm raised $1.5 billion from investors worldwide for its third global private equity co-investment fund in January, which surpassed its target of $1.25 billion, according to its press release. Neuberger manages $255 billion in assets.

By Daehun Kim

Daepun@hankyung.com