South Korea-based Korea Post’s insurance unit has proposed to commit $200 million to three blind pool private equity funds focused on buyout strategies across the US and Europe.
Blind pool investments are typically a limited partnership which does not give a specific mandate to general partners. Korea Post Insurance has been diversifying its portfolio with the formation of its alternative investment division in 2017.
Based on its request for proposal, Korea Post said, it will commit around $120 million to two middle-market funds and $80 million to an upper middle-market fund.
Korea Post plans to allocate the funds to three foreign PE fund managers who are managing a commingled buyout fund at the time of submitting an investment proposal. A commingled fund brings together different funds with similar objectives, providing a more diversified investment approach.
Managers should make an exclusive distribution agreement with registered local distributors for proposing the fund, it added. Hedge funds and real estate strategies are excluded from the global PE buyout strategy.
“The commitment amount will be allocated after taking into account evaluation results and size of the fund,” said the Korea Post in its request for proposal.
Interested parties are eligible to submit their proposals by June 12, 2018. Korea Post will carry out an evaluation and on-site due diligence between mid-June and September.
Early last month, Korea Post Insurance had announced its plan to select global fund managers for single offshore commingled hedge funds but did not disclose how much it will commit to those funds.
While by the end of the same month, Korea Post made another announcement that it was seeking interest from global infrastructure fund houses to manage its $500 million allocation to make equity investments in core infrastructure assets.
In March this year, Korea Post was looking at appointing two global PE fund managers to look after its $200 million overseas co-investment mandate.
According to Korea Post’s past annual reports, the allocation of its total assets for alternative investments such as private equity, hedge funds and real estate grew from 2.6 per cent in 2012 to 4.6 per cent in 2016 at the savings division.
For the insurance unit, the figure has grown from 4 per cent to 5 per cent between 2012 and 2015, there was no figure available for 2016. However, according to a local report, Korea Post Insurance aims to boost the allocation of total asset in alternative assets from the current 6 per cent to 10 per cent by 2020.
Korea Post is the national postal service of South Korea, under the authority of the Ministry of Science and ICT. Headquartered in Sejong City, Korea Post is in charge of postal service, postal banking, and insurance services. As at end-2017, Korea Post had more than $96 billion in total assets under management.