South Korea’s Public Officials Benefit Association (POBA) has allocated a total of $120 million to the US mezzanine funds of Crescent Capital Group, Falcon Investment Advisors and GoldPoint Partners.
The three asset managers will receive $40 million each to invest in medium-risk products such as convertible or exchangeable bonds issued by small-to-medium enterprises and mergers and acquisition financing for North American deals with a private equity sponsor.
The pension declined to name the three specific funds in the investment.
POBA sent requests for proposal to 10 foreign investment firms it selected for the bid. The fund hoped to build a closer relationship with global management houses as the investor was looking into a broader range of overseas investments.
This marks the third time this year Crescent has been selected by Korean investors to invest in the US mezzanine market. The firm’s Crescent Mezzanine Partners Fund VII is targeting $3 billion and reached a second close at $2.5 billion in July this year. Crescent recently received a $100 million commitment from Korea’s Teachers’ Pension and $50 million from Korea’s Government Employees Pension Service.
Crescent, Falcon and GoldPoint have built experience in mezzanine investments for over 30 years, and achieved about 7 percent to 10 percent of annual internal rate returns, even during the global financial crisis.