South Korean investors have poured their money into securities backed by pools of assets held by U.S. buyout giant KKR & Co as the Covid-19 pandemic is getting in the way of increasing their exposure to alternative assets abroad.

Three South Korean insurers – Kyobo Life Insurance, DB Insurance and DB Life Insurance – and the Public Officials Benefit Association recently invested a combined $290 million in senior notes backed by holdings of KKR. The amount represents 58% of the $500 million total issuance, which was also subscribed by investors from other countries including the U.S. and Germany.

The notes, issued by a special purpose entity, are due in 15 years and are backed by pools of underlying assets in KKR’s 12 funds that invest in private equity, credit and real estate. KKR also invested in a subordinated tranche, which accounts for 35% of the entity’s capital and acts as a buffer to the senior tranche. Kroll Bond Rating Agency assigned a rating of A- to the notes.

The senior notes will pay a fixed coupon of 5% per annum and 15% of the net proceeds from the fund liquidation. The deal was arranged by Samsung Securities.

Strong demand from South Korean investors indicates that they are trying to invest in foreign alternative assets in an indirect way as Covid-19 slows down deal-making, industry watchers said.

The offering came after KKR REIGN, a special purpose entity, sold $1.59 billion of securitized notes to global investors in 2019. South Korean institutional investors, mainly composed of insurers and pension funds, invested more than 30% or $480 million of the total issuance volume.

“South Korean institutional investors have a lot of confidence in KKR,” an industry insider said. “Demand for similar financial products is expected to remain steady.” (Reporting by Se-hun Jo)