IFM-Samsung infra debt fund closes on $480m

Samsung Life committed $250m to the vehicle, which is also backed by three other Korean institutions.

Australia’s IFM Investors and Korea’s Samsung Asset Management have raised $480 million for a global infrastructure debt fund from four Korean investors, including Samsung Life Insurance.

The two partners started fundraising in October last year in a bid to create a $500 million debt vehicle solely dedicated to Korean institutions.

Samsung Life said it committed $250 million to the debt fund early this year, marking its first investment in a blind-pool infrastructure debt vehicle. The names of the fund’s other LPs were not disclosed.

The vehicle will primarily target infrastructure assets in North America, Europe and Australia, focused on countries with minimum A- sovereign credit ratings. It will invest in five sectors including PPPs, power, renewables, utilities and midstream energy, where IFM said investment risk is minimised through government subsidies and long-term contracts.

“With ageing infrastructure in developed markets needing replacement, and tougher regulations on environment, as well as increasing demand for infrastructure in emerging countries with growing populations and rapid urbanisation, the global infrastructure market is expected to continue to grow,” said Koo Sung-hoon, president and chief executive of Samsung Asset Management.

The two partners expect the strategy will be able to offer stable returns to domestic
institutional investors willing to diversify their portfolio towards overseas alternatives amid low interest rates and tepid economic growth, Koo said.

Local reports said the vehicle targets an annual return of about 4 percent. IFM had not responded to queries seeking comments by press time.

“The partnership also benefits Australian investors by providing an additional source of capital from like-minded institutional investors, further increasing access to global investment opportunities and adding to member returns,” said Brett Himbury, IFM’s chief executive.

IFM, owned by 28 Australian superannuation funds, manages capital of over A$81 billion ($60.8 billion; €56.7 billion), as of March 2017, while Samsung Asset Management said in its 2016 profile book that its assets under management surpassed 200 trillion won ($175 billion; €164 billion) by the end of 2015.