IGIS to launch Korea’s first value-add fund – Exclusive

IGIS Asset Management is set to raise a blind-pool, commingled vehicle from offshore investors for value-add investments in domestic office, retail and logistics assets, PERE has learned from industry sources.

IGIS Asset Management, one of the largest real estate investment managers in South Korea, is launching its first domestic value-add fund for foreign investors this month.

The fund will be a blind-pool commingled vehicle that would be invested in office, retail and logistics assets in the country.

The Seoul-headquartered manager is targeting to raise around $400 million, one person familiar with the matter told PERE. 

Hodes Weill has been appointed to assist in capital raising efforts. The firm is targeting a net internal rate of return of around 15 percent from the fund investments, the person added.

This would be the first ever commingled value-add vehicle raised by a Korean asset manager. According to industry observers, there has been no commingled, blind-pool real estate fund for South Korea, for any investment strategy, so far because most Korean asset managers work on a club deal basis. 

IGIS Asset Management, which has been investing on a club deal basis until now, is also understood to be changing its business model to become a fund manager.

Its maiden effort in this regard is the IGIS Core Platform Fund, launched earlier this year to invest in core and core-plus deals on behalf of domestic institutional investors. The fund is understood have been anchored by the National Pension Service of Korea, and also has the Ministry of Employment and Labor Reserve Fund as an investor.

Earlier in July, IGIS acquired the Signature Towers in Seoul for $635 million via the fund, making it the largest real estate transaction in the country this year, and the largest office sale in a decade.

With the value-add fund, IGIS is now betting on the growing foreign institutional investments in the domestic market, which has continued unabated despite the political upheaval surrounding the ouster of President Park Geun-hye on corruption charges earlier this year.

According to research by property services firm Savills, Korean office investment volumes exceeded KRW 3.4 trillion ($2.9 billion; €2.6 billion) in the first half of 2017. 

IGIS Asset Management currently has gross assets under management of $13 billion of real estate across 105 properties globally.

IGIS will be speaking at the PERE Investor Forum in Seoul this November. For more details, click here http://events.perenews.com/events/pere-investor-forum-seoul-2017/event-summary-32afa1fee46044ac83bb8c24881bd84e.aspx?p=35