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South Korea’s NH Investment Securities said Wednesday it has launched a 200 billion won ($150 million) real estate fund to help institutional investors make value-added, opportunistic investments.
The parent company, the National Agricultural Cooperative Federation (NACF), supported the fund, accounting for approximately 60% of the contributions. Some real estate developers and mutual savings institutions also participated in the fund.
According to NH Investment, it is currently considering investing in five to six real estate assets.
The fund will focus on increasing the value of properties through renovations and rent increases. It also buys and develops land, and buys distressed assets at relatively low prices and renovates them to maximize profits.
To strengthen real estate investment, NH Investment established a real estate private equity division at the end of last year, managed by real estate finance experts.
The brokerage firm has strengthened its real estate investment expertise by arranging high-profile transactions.
Real estate investments led by the company include City Center Tower in central Seoul. Parc.1 is a commercial and office skyscraper located in Yeouido, Seoul’s main financial district. It will brighten up Yeouido, a residential and office building. and Angsana Residence Yeouido.
Meritz Securities debt fund
Separately, Meritz Securities aims to raise 300 billion won ($225 million) in the first half of this year for a real estate debt fund, which will be the company’s first private equity fund focused on institutional investors. It’s planned to be.
Meritz Securities and Meritz Fire and Marine Insurance will invest in the fund. Their commitment is expected to make up his 30% of the fund, with 20% from Meritz Securities and 10% from the insurance division. They use major Korean pension funds and mutual savings institutions to raise funds.
The fund will expand senior loans for real estate projects and senior secured loans secured by real estate assets.
Meritz Securities is a leading national project finance provider. The new fund is expected to help ease the liquidity crunch in the domestic real estate market, which has been hit by rising interest rates.
Investment bankers said Meritz’s fund launch is likely to encourage domestic peers to follow suit.
A source from a real estate finance company said, “Several asset management companies are expected to launch project finance funds and real estate debt funds this year to meet strong demand from institutional investors seeking high-yield funds.”
To raise funds, Meritz Securities last month registered with regulator Financial Services Commission (FSC) as a private equity general partner for institutional investors.
Starting in 2021, Korean financial institutions will no longer be allowed to raise private equity funds from institutional and individual investors at the same time, as regulators tighten their oversight of investment funds.
Write destination Ayong Yoon and Byunghwa Ryu (youngmoney@hankyung.com)
Kim Yeon-hee edited this article
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