Koramco to open office next to NPS for property investment partnership

Koramco Asset Management Co. will open a liaison office next to South Korea’s National Pension Service (NPS) to bolster 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 Seoul, according to banking industry sources on Friday.

Although several foreign investment companies have been operating offices in Jeonju, Koramco is the first Korean asset manager to open such an office 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 such as Tishman Speyer and Hines have liaison offices in the city. Among custodian banks, BNY Mellon and State Street have opened offices there.

LONGSTANDING COOPERATION

Koramco has been in partnership with NPS for a while. Back in 2006, 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.

The REIT has provided the NPS annual returns of 5%-8% for the 18 years since its launch, helping the pension fund accumulate 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 them, home to Koramco’s headquarters, was sold to Singapore’s CapitaLand Investment Ltd. for 440 billion won.

Koramco attracted substantial funds from the NPS. The country’s biggest institutional investor provided 250 billion won to renovate a building in Seoul, which Koramco bought earlier this year, under the pension fund’s move to resume investments in real estate.

Along with Kyobo AIM Asset Management Co. and Hana Alternative Asset Management Co., Koramco was shortlisted for the NPS’ real estate debt fund investment project valued at 600 billion won.

Koramco has rapidly expanded its business as its rivals struggled to manage their assets damaged by interest rate hikes.

Korea’s Public Officials Benefit Association (POBA) committed to Koramco 150 billion won in preferred stocks for offices in Seoul and Pangyo, the country’s technology hub.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com
 
Jongwoo Cheon edited this article.