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.