Korea Post’s $65 billion savings bureau has invited domestic and overseas hedge fund managers or institutions with a hedge fund offering to pitch for four new mandates.
The bureau has issued requests for proposals (RFPs) for equity market neutral, global macro, CTA and multi-strategy portfolios. Through this process it is targeting single offshore hedge funds and excludes fund of hedge funds and structured products and notes. A multi-strategy fund must comprise more than two strategies, although a single strategy cannot exceed 50%.
While the mandate sizes have not yet been decided, it is understood they will be in the range of $20 million per strategy.
News of the RFPs comes shortly after Korea Post’s $30 billion insurance bureau issued an RFP for global single hedge fund managers to pitch for two mandates of up to $40 million each, as reported.
For the latest savings bureau mandates, applicants can submit proposals for up to two funds, each in a different strategy. If the same fund is submitted by both a manager and a distributor, only the manager’s proposal will be considered. Funds already in the Korea Post Savings portfolio are not eligible to apply.
Firms are required to submit four hard copies of their investment proposals and details about the fund, written in English. In-house marketing materials are accepted. The contents should include investment strategy, portfolio construction process (historical exposure by sub-strategies, asset types etc.), risk management process and main contact points. Applicants should provide the funds’ historical monthly returns (net of fees) since inception to March 2014 in excel format.
Managers applying must have more than $1 billion in assets under management, while the AUM of the offshore fund they are putting forward must be more than $300 million. The firms must have at least three years’ fund management track record and have been established for at least three years.
As far as liquidity is concerned, the fund should provide at least monthly liquidity and/or quarterly or semi-annual redemption and have less than a one-year hard lock-up. Managers should also provide weekly net asset value (NAV) estimates and official monthly NAVs.
The selection process is as follows: RFP submission by 5pm Korea time on May 16; 1st evaluation of candidates by end-May; 2nd evaluation and presentation by end-June; on-site due diligence and final selection to follow.
After first evaluation, second-round candidates will be asked to submit supporting documents related to their investment proposal and excel data, and to provide a summary of marketing materials (less than 10 pages) translated into Korean.
Korea Investment Management (KIM) is the bureau’s sole adviser on overseas alternative investments. Companies with soft copy (email) applications should send marketing materials and excel file to both Korea Post Savings and KIM. The contacts are Choi Kwon at [email protected], Hong Yunjeong at [email protected] and KIM at [email protected]
Excel files name must show company or fund name, strategy and KPSHFRFP 201404. Managers should indicate the strategy applied for and category of the fund (ie. multi, GM, EMN and CTA).
Hard copy submissions should be sent to Global Investment Strategy Management Department, Korea Investment Management Co., Ltd. 16F, 88, Uisadang-daero, Yeoungdeungpo-gu, Seoul, Korea, 150-745