KTCU, SK Holdings to launch $1 bn fund for global co-investment

Sep 19, 2019 (Gmt+09:00)

2 Min read

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The Korean Teachers’ Credit Union (KTCU) will set up a $1 billion joint fund with South Korea’s SK Holdings Co. Ltd. to make cross-border investments in high-growth businesses to be hunted by the energy-to-telecom giant.

The two institutions will put up $500 million each for the fund with an eight-year life and begin joint investment this year for a four-year investment period.

“With this agreement, both institutions will make co-investments for a total of $1 billion in core and high-growth businesses SK Holdings is seeking out,” KTCU said in a statement released last week.

“With a partnership with SK Holdings, our institution expects to diversify global investment, which had been focused on real assets such as SOC and real estate, into innovative technologies and new growth businesses to achieve stable returns,” KTCU Chairman Sung-soo Cha was quoted as saying in the statement.

They signed a memorandum of understanding last week to build strategic co-investment relationships, under which SK Holdings is becoming the first private company to launch a joint investment fund with KTCU.

“Now that we have secured enough amount of investment money, we will be able to focus our capabilities on exploring blue-chip assets and to invest at the right timing. Our bargaining power in global negotiations will increase further,” an SK Holdings source told the Korean Investors.

The holding company of SK Group runs energy, chemicals and telecom businesses with focus on biomedicine, semiconductor parts and renewable energy.

It has invested 4 trillion won ($3.4 billion) in M&As since 2016, which include the acquisitions of US shale gas companies and US pharmaceutical company AMPAC Fine Chemicals.

KTCU, with $31 billion AUM, is the largest retirement savings fund in South Korea.

Since 2017, it had formed $1 billion joint ventures with the Teachers Insurance and Annuity Association of America (TIAA) to invest in US commercial real estate debts.

In July this year, KTCU announced a preliminary agreement reached with TIAA to launch a third joint venture with a capital of $510 million to further expand co-investments.

By Pohyung Kim

kph21c@hankyung.com

(Photo: Getty Images Bank)