Korea pension fund has $2bn to spend

Rockspring and Pramerica will advise national pension fund on investments

Article posted: 31 Aug 2010

The National Pension Service of Korea has launched a new $2bn investment programme with a view to acquiring property assets in Europe and Asia.


NPS is the world’s fifth-largest pension fund is appointing fund managers to act on its behalf in the two continents. European investment will be managed by Rockspring Property Investment Managers while Pramerica Real Estate Investors will seek assets in Asia.


Each manager will be assigned $400m of equity by NPS in discretionary mandates, which, with 60% leverage, would give them each $1bn to spend. The mandates are scheduled to be signed this week and will further NPS’s intention to expand its “alternative” assets exposure, including real estate, from 3.8% to around 10% or $27bn by 2014.


NPS’s existing overseas property strategy began only a year ago when they set out to acquire “trophy” assets in major cities. In autumn through Rockspring it acquired 88 Wood Street in the City of London for £183m from ING Real Estate Investment Management. An 18 storey commercial office tower, 88 Wood Street has 355,209 sq ft of prime locate office space in the heart of the City.


NPS also took a 50% interest in 40 Grosvenor Place in Victoria for £85m from Invista Real Estate Investment Management. Prominently located at the southern end of Grosvenor Place, SW1, the landmark building provides Grade A office accommodation to firms such as Capital International, LEK Consulting and EDF Energy


Another acquisition was that of HSBC’s London headquarters at Canary Wharf for £772.5m, in addition to purchases in Berlin, Sydney and Paris.


The new mandates with Rockspring and Pramerica will look to higher returning properties, smaller buildings with a wider risk return strategy.


Posted by Julie Tucker

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