이 기사는 2020년 01월 15일 08:00 thebell 에 표출된 기사입니다.

South Korea’s Military Mutual Aid Association (MMAA) plans to hire external alternative managers, being the first to kick off investment projects in 2020 among domestic institutions.

The mutual aid association that manages money from South Korean career military officers, worth around 10 trillion won ($8.6 billion) in total assets, has closed applications for its hiring of external alternative managers on January 10. According to the results, more than 10 domestic private equity firms have submitted their applications.

This time, the association seemingly seeks to supplement investments made in existing funds, which prompted most of the private equity firms previously picked by domestic institutions to apply for this opportunity. The MMAA specified in the notice announced on December 30 that asset managers with funds that received binding commitments worth more than 30 percent of their targeted fund size from domestic institutional investors are eligible for the application.

The MMAA plans to invest a total of around 130 billion won ($112 million) in alternative assets through this project, with 100 billion won ($86 million) allocated to private equity funds and 30 billion won ($26 million) to venture capital funds. Private equity investments are comprised of large-cap and mid-cap funds, for which the association earmarked 40 billion won ($34 million) and 60 billion won ($52 million), respectively. The MMAA plans to pick five managers for private equity and three for venture capital investments.

Asset managers that pass the document screening will pitch their investment proposals later this month. This will be followed by due diligence on finalists before the final decision scheduled to be made by the MMAA at the end of February.

The MMAA has made annual investments in blind-pool funds of external alternative managers since 2016, with commitments worth around 130 billion won each year. Last year, the association invested 120 billion won in private equity and venture capital funds. The proportion of the allocation to private equity and venture capital has changed every year. In 2019, the MAAA invested three times larger amount in private equity funds, while allocating six times larger amount to private equity in 2018.

Three managers were picked for investments in private equity and venture capital each last year. They included STIC Investment, IMM Private Equity and Q Capital Partners for private equity as well as Partners Investment, TS Investment and Stonebridge Ventures for venture capital.

In 2018, four private equity firms – STIC Investment, Neoplux, IMM Investment and a consortium of BNW Investment and Industrial Bank of Korea – received investments, while two venture capital firms – Korea Investment Partners and Aju IB Investment – were picked by the MMAA.

(By reporter Kim Byung-yoon)