Korea Teachers’ Pension is targeting an ambitious overseas expansion plan, with the aim of doubling its real estate assets under management by over the next five years.
Young Sin Jeong, head of the overseas alternative investment team at the Korean pension fund told PERE that the firm is looking to increase its overseas real estate exposure to 1 trillion Korean won ($923 million; €779 million) by 2021, up from the current 500 billion won.
Jeong, who was speaking at PERE’s Global Investor conference in Seoul Thursday, said that the investor is planning to increase its overall alternative investment allocation. Currently, 20 percent of Korea Teachers’ Pension’s total assets under management consist of alternative investments, including real estate. Korea Teachers’ Pension currently has around 18 trillion won in total assets under management.
In terms of investment strategy, Jeong said that Korea Teachers’ Pension is now planning to diversify its real estate portfolio into core and core-plus strategies in North American and European cities for higher yields. Real estate mezzanine deals are also on the cards.
At a time when global interest rates are set to rise, putting an end to a protracted low interest rate period, Jeong also said that the pension fund would look to tighten regulations on risk management.
In January this year, the Korean investor appointed David Park, former head of investments at Allianz Life Insurance, as its new chief investment officer. Park replaced Min-ho Park, who reportedly stepped down from his position late 2016.