Key Takeaways
- • South Korea's Public Officials Benefit Association (POBA) has selected GCM Grosvenor as separate account manager for a $300 million private infrastructure SMA, according to a local newspaper report cited by KED Global.
- • The SMA targets unlisted infrastructure in North America, Europe, Australia and Asia, with a 13-year investment period extendable by two years.
- • The mandate targets a net IRR of 6-8%, after management and performance fees, and is expected to launch as early as September.
- • The award is GCM Grosvenor's first mandate from POBA, following earlier relationships with the National Pension Service (NPS) and Korea Investment Corp.
- • POBA is expanding its SMA and co-investment platforms to speed capital deployment and increase exposure to real estate and infrastructure.
Summary
South Korea's Public Officials Benefit Association (POBA) has picked GCM Grosvenor, the Chicago-based alternative investment firm, as its new separate account manager to invest $300 million in private infrastructure, according to a local newspaper report. The Financial News reported the mandate the prior week.
The separately managed account (SMA) will target privately owned or unlisted infrastructure assets in North America, Europe, Australia and Asia. It carries an investment period of 13 years, which can be extended by two years. The SMA targets a net internal rate of return of 6-8%, measured after management and performance fees, and is expected to launch as early as September.
The mandate marks the first time GCM Grosvenor will manage assets for POBA. The firm previously won mandates from the National Pension Service (NPS) and Korea Investment Corp., South Korea's two largest asset owners. In 2016, GCM Grosvenor was selected alongside BlackRock Alternative Advisors as one of two fund-of-hedge-fund managers by the NPS, each receiving $500 million in commitments. GCM Grosvenor manages approximately $65 billion across private equity, infrastructure, real estate, credit and absolute return strategies.
The award fits a broader pattern at POBA, a $15 billion pension fund for South Korean provincial government employees. This year the fund has expanded its SMA and co-investment platforms to speed capital deployment and gain greater control over investments, while increasing exposure to real estate and infrastructure. It recently opened a $300 million SMA managed by Kyobo AXA Investment Managers to diversify its real estate portfolio into logistics and data centers. Last month it renewed its four-year-old SMA run by CBRE Global Investors and IGIS Asset Management with a commitment of 270 billion won, targeting life science buildings, last-mile distribution centers and student housing in Europe. POBA has also previously set up joint ventures with CalSTRS and Denmark's PFA to co-invest in overseas properties.
The separately managed account (SMA) will target privately owned or unlisted infrastructure assets in North America, Europe, Australia and Asia. It carries an investment period of 13 years, which can be extended by two years. The SMA targets a net internal rate of return of 6-8%, measured after management and performance fees, and is expected to launch as early as September.
The mandate marks the first time GCM Grosvenor will manage assets for POBA. The firm previously won mandates from the National Pension Service (NPS) and Korea Investment Corp., South Korea's two largest asset owners. In 2016, GCM Grosvenor was selected alongside BlackRock Alternative Advisors as one of two fund-of-hedge-fund managers by the NPS, each receiving $500 million in commitments. GCM Grosvenor manages approximately $65 billion across private equity, infrastructure, real estate, credit and absolute return strategies.
The award fits a broader pattern at POBA, a $15 billion pension fund for South Korean provincial government employees. This year the fund has expanded its SMA and co-investment platforms to speed capital deployment and gain greater control over investments, while increasing exposure to real estate and infrastructure. It recently opened a $300 million SMA managed by Kyobo AXA Investment Managers to diversify its real estate portfolio into logistics and data centers. Last month it renewed its four-year-old SMA run by CBRE Global Investors and IGIS Asset Management with a commitment of 270 billion won, targeting life science buildings, last-mile distribution centers and student housing in Europe. POBA has also previously set up joint ventures with CalSTRS and Denmark's PFA to co-invest in overseas properties.
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