South Korea’s Samsung Life Insurance has committed $250 million to a global infrastructure debt fund launched by IFM Investors and Samsung Asset Management.
The fund has a target size of $500 million and is dedicated only to Korean institutional investors. It has raised $343 million to-date from four different Korean institutional investors since it started fundraising discreetly in October last year. The fund is expected to reach its a close in early March, according to a PDI source familiar with the deal.
The fund will mainly target roads, airports, power plants and water facilities in the US, Europe and other regions for an expected annual return of about 4 percent, according to a local news report.
Samsung Asset Management and IFM Investors will co-manage the fund together. The two firms are responsible for fundraising and deal sourcing, respectively, according to the same source cited above.
Samsung Asset Management confirmed the transaction but declined to comment further.
“By investing in the JV, we can allocate our money more efficiently because of the global platform provided by IFM,” one of the fund’s investors said. “Also, by investing in a blind-pool fund, we can share the risk with other LPs, it’s safer and more effective than committing $500 million in a single project.”
This is Samsung Life Insurance’s first investment in a blind-pool infrastructure debt fund.
Last year, the insurance company partnered with French investment bank Natixis to invest in global aviation and infrastructure debt on a project base. Due to the lack of good infrastructure opportunities in Korea, it plans to tap the international market via the better quality sourcing platform and network provided by global asset managers.
IFM Investors is an investor-owned fund manager of infrastructure, debt investments, listed equities and private capital. The firm is owned by 29 Australian pension funds and has been investing in infrastructure on behalf of institutional investors globally for more than 20 years.
The company’s Global Infrastructure fund (GIF) is an open-end fund of core infrastructure investments in countries in the Organisation for Economic Co-operation and Development (OECD). As of 31 December 2015 GIF had a net asset value of $10.6 billion, with portfolio companies located in the US, the UK, Germany, Austria, Mexico, and Poland.