South Korea’s two big limited partners (LPs), MG Korean Federation of Community Credit Cooperatives (KFCC) and the Export-Import Bank of Korea (KEXIM), are in the process of selecting blind-pool funds that will focus on alternative investments.
According to industry sources, KFCC plans to contribute 30 billion won ($24 million) to 50 billion won to three or four funds that will have passed both qualitative and quantitative evaluations in June. KEXIM is also reportedly said to be selecting blind-pool funds for the mandate of its funds.
KFCC was banned from contributing to blind-pool funds in 2012 by the Ministry of the Interior and Safety, which oversees the community bank, as it incurred valuation losses from a domestic real estate fund after the 2008 global financial crisis. KEXIM has also restarted its blind-pool fund investment project for the first time since 2018.
The two LPs plan to continue to invest in private equity funds (PEFs) in the second half of this year.
More than 30 blind funds have submitted investment proposals to KFCC, which will close applications this week,
“As the low-interest rate trend continues, institutions that have preferred safe assets like deposits and bonds are turning their attention to alternative investments seeking higher returns,” said an official in the investment industry. (Reporting by Arrum Rho)