South Korea’s Government Employees Pension Service has allocated a total $100 million to HPS investment Partners and Crescent Capital Group for overseas private debt investments.
The two asset managers will receive $50 million each to invest mainly in mezzanine and subordinated debt in North America.
The managers were selected after a request for proposals was published in July this year.
“We selected managers that meet pension funds’ management philosophy of consistent management, rather than those that posted one-time outstanding performance,” GEPS told local press.
Crescent Capital recently received a $100 million commitment from Korea’s Teachers’ Pension to invest in medium-risk and medium-return subordinated corporate debt deals in North America. The firm’s Crescent Mezzanine Partners Fund VII is targeting a total size of $3 billion and reached a second close at $2.5 billion in July this year.
HPS Investment Partners spun out from JPMorgan in March this year. It specialises in private equity, debt and mezzanine investments in both public and private capital markets and has approximately $24 billion of assets under management.
There is a growing interest from Korean investors to invest in the US private credit market, with many RFPs coming from the state’s pension funds such as Korea Post and Police Mutual Aid Association.
“Korean local investors generally like US mezz debt investment due to relatively higher returns considering the current low interest rate environment,” a Korean pension fund source told PDI.