The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
GSAM is KTPFÆs first strategic partner for overseas investments, with both parties having signed a memorandum of understanding to pursue this partnership in February. KTPF already has a second overseas strategic partnership with ING Investment Management û having signed an agreement last month û which is expected to manage W200 billion for the pension fund. KTPF received proposals from 16 foreign asset management companies operating in Korea.
Under the deal with Goldman, the fund house will allocate the W300 billion among several of its equities, fixed income and alternative funds that invest in various markets worldwide, according to a spokesperson. KTPF has already chosen the funds to invest in from a list of products provided by the GSAM.
In addition to overseas fund management, GSAM will partner with the KTFP to provide professional training aimed at enhancing the pension fundÆs investment capabilities, including equities that are listed in foreign securities exchanges and alternative investment-related products.
Oliver Bolitho, head of GSAM in Asia ex-Japan, says the fund houseÆs selection was based on an extremely professional and rigorous process by the KTPF.
ôBased on this agreement, GSAM will deploy its asset allocation, risk-budgeting and investment expertise across a number of diversified asset classes,ö he says, adding that the fund house will focus on improving the pension fundÆs overall risk-return profile.
This is KTPFÆs first foray into equities markets overseas. KTPF, which manages the pension funds of private school teachers, had W5.6 trillion in assets as at end-2006, of which around W800 billion was invested in fixed-income products overseas. KTPF has been increasing its allocation to equities since last year to improve its returns.
Korean institutional investors are generally quite new to overseas investments and remain desperate for training and understanding how the business works. The template was set last year by the $230 billion National Pension Service (NPS), which forged strategic relationships with Credit Suisse Asset Management and Morgan Stanley Investment Management, as well as with the World Bank and large pension funds in Western countries.
GSAM, the asset management arm of Goldman Sachs, manages around $780 billion in assets. The fund house has been providing discretionary investment advisory services since 1989 and has investment professionals in all major financial centres around the world. It offers investment strategies across a broad range of asset classes to institutional and individual clients globally.
This is GSAM's second major mandate from pension funds in Asia in recent days. It recently received a $250 million mandate to run a global fixed-income portfolio from TaiwanÆs Labour Pension Fund.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.