NPS to put money into co-investment funds for first time in four years RFP is expected to be issued by late March

Translated by Ryu Ho-joung 공개 2021-03-19 13:57:48

이 기사는 2021년 03월 19일 10:31 더벨 유료페이지에 표출된 기사입니다.

The National Pension Service of South Korea (NPS) plans to make commitments to co-investment funds for the first time in four years, after two co-investment funds previously created have been fully deployed.

The 833.7 trillion won ($743.4 billion) pension fund will issue a request for proposal (RFP) later this month to allocate money to private equity including co-investment funds, industry sources said.

“Two co-investment funds that NPS participated in as an anchor about four years ago have been fully invested,” a source said. “NPS plans to select new managers for the strategy.”

The pension fund started to allocate money to co-investment funds in 2017, when it issued a RFP seeking managers for private equity mandates totaling 1.55 trillion won, with 400 billion won allocated to co-investments.

At the time, more than 10 managers submitted proposals. After weeks of the selection process, Daishin Private Equity and a consortium of Shinyoung Securities and SK Securities were awarded co-investment mandates of 200 billion won apiece.

With co-investment funds, the pension fund can make investment decisions more quickly when investment opportunities arise, industry watchers said. For blind-pool funds, general partners need to get approval from limited partners, like NPS, to deploy additional capital to an investment.

In 2017, NPS committed capital worth 60% to 80% of the fund and general partners were required to commit more than 20% of the fund. The fund’s life was 10 years, which can be extended twice for one year each, with the investment period of 5 years. (Reporting by Byung-yoon Kim)
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