South Korea’s Public Officials Benefit Association (POBA), a local pension fund for government officials, will allot $200 million to private equity vehicles this fiscal, a 100 per cent jump, from its allocation last year, a report said.
This (2015) was also the first instance of POBA investing in global PE firms after the 2007 financial crisis.
Mergermarket, in a report, quoting POBA’s chief investment officer Dong-Hun Jang, said, the Korean firm was interested in funds that targeted Europe, and added that it had already made contact with a few GPs in that continent. The report further said that POBA found Europe more attractive than China, as the latter presented regulatory uncertainties for investors.
The report also added that POBA would prefer to invest in PE firms that had more than $5 billion in assets under management.
This rules out POBA’s investments into most venture capital firms, as they would not be able to meet the $5 billion assets under management criteria.
According to the report, Dong-Hun Jang also said POBA is likely to spread its investments across ‘four to five general partners (GPs),’ indicating that it would invest around $40 to $50 million into each vehicle. It is probable that the fund will select GPs in Europe and Australia, given the firm’s interest in the two developed markets.
Founded in 1975, POBA is also looking at putting $58 million in infrastructure outside South Korea. The amount could potentially go up to $84 million, if the fund manages to sell various existing assets.