Managers who were previously awarded private equity mandates by the National Pension Service (NPS) are most likely to be selected again by the Military Mutual Aid Association (MMAA) of South Korea.

Shortlisted PE firms were interviewed by MMAA on September 25, industry sources said on September 28. MMAA is looking for managers to award 150 billion won ($126 million) worth of private equity mandates.

MMAA is expected to pick about two managers for a combined mandate of approximately 40 billion won. IMM Investment and JKL Partners were been shortlisted and had interviews. Final selections are expected in October.

Market insiders widely expect most of the managers who applied for mandates from NPS in June to be strong candidates for MMAA. IMM Investment and JKL Partners are also considered strong candidates to win mandates from Yellow Umbrella, Korea Post and Korea Scientists and Engineers Mutual-Aid Association.

“About six proposals were received for MMAA’s regular category,” said an industry source. “Market insiders widely expect managers who won mandates from NPS will also be picked by MMAA.”

MMAA awarded a combined 100 billion won worth of private equity mandates to five managers in February. The unusual move for MMAA – which has issued a request for proposal for private equity once a year for the past few years – is seen as an effort to expand its exposure to alternative assets such as private equity and real estate.

MMAA has also created a new category, called the Rookie League, to allow smaller firms to compete with those of similar size. To apply for this category, firms must be less than three years old, have 100 billion won or less in assets under management and should not have managed MMAA’s money before.

Some industry watchers said MMAA may change its selection process from a current “beauty contest” to a screening system. The beauty contest is where bidders for the mandates compete against each other by making a presentation to MMAA. The screening system involves the organization receiving proposals from individual PE funds which are in the process of fundraising, reviews them and makes an investment decision.

MMAA has mostly chosen its managers through the beauty contest system since 2016. (Reporting by Byung-yoon Kim)