Teachers’ Pension, a South Korean pension scheme for private school educators, has shortlisted six firms that will move on to the next stage of the process to select external alternative managers.
Teachers’ Pension, which is in the process of selecting external managers for its alternative investments portfolio, has recently informed firms of their inclusion in the shortlist, sources close to the matter said on April 8.
Total six firms, twice the number of available spots, have reportedly been included in the shortlist. From this week the pension fund will conduct due diligence on the shortlisted firms as well as interviews which include presentations by firms. The final results are expected to be announced before the end of this month.
The speed of the selection process has been impacted by the coronavirus outbreak, which made the pension fund postpone the process for a couple of weeks. But it has reportedly made a decision to finish all procedures by April.
Teachers’ Pension plans to invest total 150 billion won in three funds, with each expected to receive 50 billion won. This amount is greater than the per-fund investment from other domestic institutions, like the Government Employees Pension System (GEPS) and the Public Officials Benefit Association (POBA), both of which committed 40 billion won to each fund selected through their recent alternative investment programs. That was one reason for many PE firms submitting their proposals to Teachers’ Pension.
This is the fourth time over the last five years that Teachers’ Pension selected external managers to invest in blind-pool funds. Most recently, in 2018, it picked STIC Investments and IMM Private Equity to commit a combined 200 billion won. In 2017, it invested total 60 billion won in funds run by SG Private Equity and Aju IB Investment. In 2015, five firms – STIC Investments, IMM PE, Mirae Asset Global Investments PE, Corstone Asia and NAU IB Capital – received 20 billion won each from the pension fund.
(By reporter Rho Ar-rum)