Korea’s pre-eminent state investor, the National Pension Service (NPS) of Korea, has brought its backing of London-based real estate investment manager, Rockspring Property Investment Managers, to the €1 billion mark after awarding the firm another separate account mandate.
PERE can reveal the KRW442 trillion (€320 billion; $430 billion) state pension fund has agreed to award Rockspring a mandate to invest €300 million via a pan-Europe, value-add strategy. It is believed the mandate will be signed by the end of the summer.
It is the third mandate to be awarded by NPS to Rockspring and is evidence of the state pension’s support of the firm which extends back as a far as 2007 when it backed the fourth fund in its TransEuropean fund series, a vehicle that ultimately collected €274 million from investors.
Since then the relationship between NPS and Rockspring has strengthened. Following that fund investment, a mandate to acquire core real estate on a deal by deal basis, first in London and then in Europe, was awarded in 2009. Deals undertaken for that mandate included the £183 million (€231 million; $309 million) purchase of 88 Wood Street, an office in London, a 50 percent stake in 40 Grosvenor Place, another office in London, for £85 million, and a €217 million investment in the O’Parinor shopping centre in Paris.
Those deals led to a $400 million mandate to acquire core real estate in Europe the following year and a €75 million investment into Rockspring’s fifth TransEuropean fund, which attracted €350 million from investors in all.
The loyalty showed to Rockspring is in keeping with NPS’ strategy of repeatedly backing investment managers that it feels have performed well for it. Other real estate investment managers it has backed in recent years include Pramerica Real Estate Investors, Hines and Invesco. In a further example, PERE reported in June that NPS had increased its commitments to Cleveland-based investment and advisory firm Townsend to $1.3 billion with a further $400 million investment mandate for Asia ex-Korea.
NPS has communicated its aspirations to grow the alternative assets component of its investment portfolio in recent years. Alternative assets currently account for 9.6 percent of its total assets but the state pension is understood to want to increase that percentage. Within the international component of its alternative assets, 56.2 percent is real estate investments. Within the domestic component of its alternative assets 27.3 percent is real estate investments.
Neither Rockspring nor NPS would comment.