South Korea’s Public Officials Benefit Association (POBA), a pension fund for local government officials, is inviting international asset managers to bid for its US$250 million private debt mandate.
POBA is looking for five managers to oversee five private debt funds – four focused on the US and one on Asia – it says in a request for proposal on September 10.
The selected managers, who will manage $50 million each, are expected to invest the funds in senior secured loans through direct lending.
“It’s the fourth private debt mandate for POBA since the pension began to invest in private lending in 2013,” a spokesperson for the fund tells Asia Asset Management (AAM).
Applications are open until September 26, and evaluations will be carried out in late October.
POBA, like other large Korean pensions, are in the midst diversifying geographically, according to Marian Rajanathan, manager for Asian investors at data provider Preqin.
“They need to look outside of Korea for investment opportunities to avoid concentration risk in their portfolios,” Ms. Rajanathan tells AAM.
She says private debt is gaining traction among Korean institutional investors for three major reasons: diversification, reliable income stream, and high risk-adjusted returns.
POBA Chief Investment Officer Dong-Hun Jang told the UK’s Private Debt Investor this May that private debt funds with exposure to recovery services and pools of individual rehabilitation loans in the US are on the pension’s radar.
Seoul-based POBA currently has around $11 billion of total assets under management.