Korea Post to commit 300 billion won to senior loan fund Korean government agency to select one or two fund managers

Translated by Ryu Ho-joung 공개 2020-06-01 08:01:25

이 기사는 2020년 06월 01일 08:00 더벨 유료페이지에 표출된 기사입니다.

Korea Post is looking for external managers for its senior loan strategies.

The Korean government agency has issued a request for proposal for senior loan fund managers, sources said on May 28. It aims to commit a total of 300 billion won ($242 million) to one or two managers investing in domestic senior loans. The capital committed by the agency will be drawn from its two investment units – Postal Savings Service and Postal Insurance Service.

Senior loan funds typically invest in securities backed by low-quality loans. But Korea Post this time required the selected managers to deploy more than 80 percent of the fund size to securities backed by “senior loans (including those used for refinancing) involved in M&A transactions.” The fund can invest 30 percent or less of total committed capital in foreign assets. The fund’s investment in one company cannot exceed 30 percent of total committed capital.

The fund is a blind pool and the manager needs to close it within six months after being selected. There is no requirement on a minimum fund size. The life of the fund should be no more than eight years with options to extend it upon agreement with limited partners. The investment period should not exceed four years after the fund’s creation.

Previously Korea Post invested primarily in foreign senior loans, seeking a stable yield. It first committed 400 billion won to a senior loan fund investing in domestic senior loans last year.

Korea Post will receive proposals until June 5 with the selection process likely conducted for about a month. The final results are expected to be announced in July.

(Reporting by Hee-yeon Han)
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