Teachers’ Pension selects three firms as external managers

Teachers’ Pension, a South Korean pension scheme for private school educators, has selected three firms to commit a combined 150 billion won.

Teachers’ Pension has recently informed the three firms – MBK Partners, SkyLake Investment and Stonebridge Capital – of the final results, sources close to the matter said on April 24.

The pension fund will 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. The Construction Workers Mutual Aid Association (CWMA) committed 25 billion won and the Military Mutual Aid Association (MMAA) committed 20 billion won to each fund selected through their alternative investment programs.

The competition among firms to be selected as external managers of Teachers’ Pension was fierce. Total eight firms reportedly submitted proposals to the pension fund at the end of February. Teachers’ Pension shortlisted six firms, twice the number of available spots, and conducted due diligence on the shortlisted firms as well as interviews.

The pension fund held the investment committee meeting on April 22 and notified the three firms on April 24. Teachers’ Pension mulled over ways to conduct due diligence due to the coronavirus outbreak, but it has finished all procedures as planned.

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)