Korea Post Savings, the government-backed savings arm of the national post, is planning to commit $450 million to three global real estate fund managers playing in the US commercial first mortgage loan market.
According to the statement, each manager will receive approximately $150 million for a separately managed account (SMA) to invest in core assets with stabilised properties in gateway and secondary regions.
A qualified vehicle is expected to deliver gross IRR of 3.8 percent and for each loan, IRR should be more than 200 basis points over 10 years. The vehicle is also required to invest in at least five loans with a minimum ticket size of $20 million. The loan term is set to be 10 years with two years of extension options.
Selected managers will co-invest at least 50 percent of each loan while Korea Post will invest at most 50 percent of each. The management fees to be paid to overseas and domestic fund houses is capped at 40 basis points of the outstanding invested capital per year, without paying performance fees.
The deadline of the application is set at 5pm (Korean time) on 2 September.
The $60 billion posting agency has been actively looking at private debt investment globally. It published two requests for proposals seeking asset managers to invest in the CLO market earlier this year.