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South Korea’s NPS, Allianz form US$2.3 billion property fund

Wooden house with many coins by its feet
By Asia Asset Management  
June 30, 2020

South Korea’s National Pension Service (NPS) and German insurer Allianz Group have set up a US$2.3 billion fund to tap “outsized growth prospects” in Asia Pacific property.

The Singapore-domiciled Allianz Real Estate Asia-Pacific Core I will build a diversified portfolio of income-producing assets, and seek investment opportunities across the office, logistics, multi-family and student housing sectors in Japan, Australia, Singapore, Hong Kong, and China, Allianz says in a statement on June 29.

The insurer says the size of the fund, which is equally owned by the NPS and Allianz’s real estate investment unit Allianz Real Estate, could more than double to over $4.6 billion. Allianz Real Estate is the investment manager.

According to NPS Chief Investment Officer Hyo-Joon Ahn, the partnership represents “an excellent opportunity” to expand the pension fund’s exposure to quality assets in the Asia Pacific region through co-investment.

“The combined global experience and local expertise of the two institutions will provide prioritised access to attractive investment opportunities,” Mr. Ahn says in the statement.

Rushabh Desai, Asia Pacific CEO of Allianz Real Estate, adds that Asia Pacific continues to have “outsized growth prospects with individual markets operating at varied pace, offering an opportunity to build a diversified portfolio within the region”.

NPS, the world’s third largest pension fund, had around $600 billion of total assets as of March 2020.

Allianz Real Estate had 73.6 billion euros ($82.4 billion) of assets under management at the end of 2019.