Investors

Korea’s POBA selects five GPs for private debt

The investor is ramping up its allocation to the asset class in the US and Europe.

By
Christie Ou
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South Korea’s Public Official Benefit Association (POBA) has allocated a total of $120 million to five asset managers to invest in senior debt strategies, according to a POBA source.

POBA has committed $30 million each to Guggenheim Partners and Alcentra while committing $20 million each to Medley Capital, BlueBay and Park Square Capital.

Dong Hun Jang, the chief investment officer of the fund, thinks that although private equity potentially generates a higher return, private debt provides more stable income and cash flow for pension funds like POBA.

According to a recent request for proposal (RFP) issued by POBA, the pension fund said it was in the process of selecting managers for a total commitment of $300 million to private equity, private debt (mezzanine or distressed) and others (secondary, funds of funds and co-investment).

In June 2016, POBA allocated a total of $100 million to Benefit Street Partners, Babson Capital Management and Permira for private debt investment.

Last year, the organisation committed over $640 million to private debt investment outside the real assets category, including $120 million to private debt funds, $100 million to CLOs, $120 million to mezzanine debt, and about $300 million to structured notes.