GEPS selects Apollo and Cerberus for up to $80m each

The Korean pension fund selected the two managers shortly after it issued an RFP last month.

South Korea’s Government Employees Pension Service (GEPS) has selected Apollo Global Management and Cerberus Capital Management to manage its $160 million allocation to private debt funds, according to a statement.

According to a Request for Proposal (RFP) issued last month, each manager will receive $50 million to $80 million for their credit-related opportunistic funds in the US and Europe.

The pension fund is looking to construct a private debt portfolio with a target return of upper single digits.

GEPS is one of the earliest Korean investors to enter the private debt market. Last year, it committed a total of $100 million to US-based HPS Investment Partners and Crescent Capital Group for overseas mezzanine investments after it invested €60 million in two private debt fund houses in Europe in 2015.

With changing market conditions and financial regulations, many Korean investors see private debt as a way of providing more stable income and cash flow in the long term.

Fellow Korean investor the Public Official Benefit Association (POBA) recently allocated a total of $120 million to five asset managers comprising Guggenheim Partners, Alcentra, Medley Capital, BlueBay and Park Square Capital to invest in senior debt strategies.