The National Pension Service of Korea has awarded a third multi-hundred million dollar mandate to a third-party investment manager this year.
The $270 billion pension fund has this month awarded a $300 million separate account mandate to The Townsend Group, the Cleveland-based advisory and investment management business, in order to tap into distressed real estate fund opportunities in the US.
The mandate follows two $400 million mandates awarded to Rockspring Property Investment Managers and Pramerica Real Estate Investors for investments in Europe and Asia respectively (see the September issue of PERE).
However while those mandates are focussed on core direct real estate investments, the mandate awarded to Townsend is aimed at acquiring positions in troubled real estate funds with a view to recapitalising them.
Following the appointment, the Wall Street Journal quoted Townsend partner Anthony Frammartino as saying: “We believe this to be an opportune strategy at this point in the market cycle, as the industry struggles with ongoing liquidity and capital constraint.”
The real estate arm of the National Pension Service has been seeking to increase its footing in the sector of late following an increase in allocation by the state fund to alternative investments from 3.8 percent in 2008 to approximately 10 percent by 2014.
Within its current alternative assets allocation, real estate accounts for about 2.5 percent of NPS’ total assets.