Korea Scientists and Engineers Mutual-Aid Association (SEMA) announced plans at a rare press conference on Wednesday (July 22) to diversify its roster of private equity and venture capital managers and increase investment in distressed assets.
SEMA, which has been emerging as a major investor in alternative investment, said it would provide more opportunities to newer and smaller investment firms as the list of alternative managers was diversified. The briefing was the first since the association’s chairman, Lee Sang-mok, took office in November 2018, and was attended by Lee and other senior officials.
“I think selecting asset managers with growth potential to give them mandates to manage funds and help them grow is one of our key roles to play as an asset owner,” Lee said.
When SEMA issued a request for proposals for private equity and venture capital managers last year, it specified that only firms younger than three years would be allowed to apply. The association is expected to issue a similar request for proposals this year, and also plans to gradually expand its exposure to distressed and special situations strategies.
“We plan to allocate more funds to special situations opportunities, especially in fixed income and alternatives investments,” chief investment officer Huh Sung-moo said during the conference. He revealed that SEMA had recently put $100 million in a fund investing in the Term Asset-Backed Securities Loan Facility, the U.S. Federal Reserve’s program that aims to stimulate new lending and securitization.
Alternative investments accounted for about 36% of SEMA’s total assets at the end of last year.
SEMA said it aims to increase its membership to 150,000 and grow assets under management to 20 trillion won by 2026. The association had 6.6 trillion won ($5.6 billion) in assets under management at the end of 2019. (Reporting by Ik-hwan Choi)