POBA goes direct in US real estate credit

The Korean pension fund has re-upped with Square Mile Capital, but this time with a bigger cheque.

Korea’s Public Official Benefit Association (POBA) has committed $200 million to Square Mile Capital Management for a co-investment opportunity in the US real estate debt market, an investment officer from the pension fund confirmed with PDI.

The commitment was made last week as POBA’s investment committee approved its preliminary commitment to the US real estate manager during the meeting. The co-investment vehicle is structured as a joint venture, according to the officer.

The real estate manager has a  mezzanine debt fund it launched this year, Square Mile Credit Partners II, according to an SEC filing recorded on 2 July. It had garnered $152 million for the fund as of 26 June.

Among investors which committed to Fund II, Teacher Retirement System of Texas (TRS) disclosed its commitment of $150 million on 3 July. The fund’s strategy is described as real assets special situations, according to TRS’ monthly commitment disclosure. TRS previously committed $150 million to Fund I, according to PDI data. Fund I held a final closing in 2015 at $857 million.

POBA is one of the existing investors of Square Mile Credit Partners I.

PDI previously reported that POBA targets US mid-market funds that have a seven- to eight- year life with a target internal rate of return over six percent per annum.

POBA has a large private debt manager roster which included Antares Capital, Ares Management, Golub Capital Partners, Guggenheim Partners, Medley Private Debt and Benefit Street Partners and Barings (rebranded from Babson Capital Management following a merger) as of 30 June.

It has also committed to European debt managers Alcentra, Park Square Captial, and Permira Debt Managers, among others.

POBA’s global alternative investment portfolio was sized at 6 trillion won ($5.4 billion; €4.6 billion), accounting for 54.7 percent of its total invested assets as of end-2017.