The Korea Post savings bureau is inviting real estate managers to pitch for a global mandate of at least $1 billion as it strives to add exposure chiefly to US and European assets.
The bureau, which manages some $60 billion in assets, is seeking to raise at least $1 billion for its 2013 Opportunistic Blind Global Real Estate Fund. The public tender was launched on October 1 and runs until 5pm on October 30.
The mandate is on a capital-call basis. The expected investment period is less than five years, with the project’s total duration less than eight years, with a maximum two-year extension.
If managers achieve an internal rate of return (IRR) of more than 8% per year, they may be eligible for a bonus. This would be paid on an annual basis following evaluation including a claw-back clause, but is subject to change in accordance with prevailing market conditions.
The bureau stipulates that at least 80% of initial investments must be in US or European real estate assets. For the US, strategies should be limited to value, distressed or opportunistic; for Europe, this is limited to distressed and opportunistic.
An additional requirement is that for European real estate assets, at least 50% must be invested in countries within the Organisation for Economic Cooperation and Development (OECD). There are limits on investing in Greenfield developments and levered strategies (debt-to-equity ratio of less than 150%).
The selection process features an initial quantitative screening, followed by a presentation for the selected candidates within 30 business days from the submission deadline, due diligence (within 60 days) and final selection (within 90 days).
All applicants are required to have an office presence in Korea or a Korean-speaking member of staff. They should submit a maximum two-page fact-sheet on their proposed project in Korean with contact information (mobile number, email address), and three hard copies in both Korean and English.
This should explain the rationale for the project and include data projections. If they pass this stage, applicants are required to submit a maximum 25-page presentation.
Korea Post has two financial service bureaus: postal savings and the postal insurance bureau, both under the management of the Ministry of Science, ICT & Future Planning. Postal savings manages around $60 billion and insurance $27 billion.
All inquiries and entry submissions should be made via email, in person or registered post (hard copies) to Mr Noh, Jae Gu (+822 2195 1396) and Mr Kim, Dal Ho (+822 2195 1397) at [email protected].
The postal address is: Alternative Investment Division, Postal Savings Bureau, Korea Post, Jong-ro 6, Jongro-Gu, Seoul, Korea. 110-110.