Samsung, IFM launch infrastructure debt fund for Korean investors

Samsung Asset Management and IFM Investors have launched a global infrastructure debt fund for Korean investors.

The Samsung Asset Management/IFM Investors Infrastructure Debt Fund has raised US$480m (€448m) from four large Korean institutions.

IPE Real Estate understands all the investors are Korean insurance companies.

One of the key investors is Samsung Life Insurance, according to Korean media, which reports it has invested US$250m in the fund.

Its primary investment destinations will be North America, Europe and Australia. It will invest in debt securities with a minimum credit rating of A-minus.

Samsung Asset Management and IFM said the fund will focus on five main sectors – public-private partnerships (PPPs), power, renewables, utilities and mid-stream – where risks are mitigated by government subsidies and long-term contracts.

Brett Himbury, IFM Investors’ chief executive, told IPE Real Estate that Korean investors aleady had experience in infrastructure debt in their domestic market but the new fund would help them globalise their investments.

Koo Sung-hoon, president and chief executive of Samsung Asset Management, spoke of the opportunities that would arise in the sector because of ageing infrastructure in developed markets. Tougher regulations on the environment would also place increasing demand on infrastructure, he said.

“We expect, with this collaboration, to be able to offer stable returns to local institutional investors who are further diversifying their investments to overseas alternatives amid the current low interest and low growth investment environment,” Koo said.

Himbury said the collaboration wil benefit IFM Investors’ owners – which are a number of superannuation funds – “by providing an additional source of capital from like-minded institutional investors, further increasing access to global investment opportunities and adding to member returns”.

IFM, which manages AUD81bn, of which AUD6bn is invested in debt, has been in discussion with Samsung on the global infrastructure debt fund for 12 months.

Depending on the performance of the first infrastructure debt fund, it is expected that Samsung may consider a follow-up vehicle.

Fundraising for the first vehicle began in October last year and closed in March.

Last November, IFM Investors teamed up with South Korea’s KDB KIAMCO, the infrastructure-investing arm of a state-run bank, to raise a US$100m global infrastructure debt fund.

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