CapitaLand Investment Limited (CLI), a global real asset manager, has closed its first South Korea private credit fund with a total equity commitment of KRW 180bn (£992m).
The CapitaLand Korea Investment No. 1 Private Equity Fund (PEF) will invest in construction, asset-backed or mortgage loans for asset classes such as data centres, lodging, offices or residential, in gateway cities in South Korea.
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The move grows Singaporean headquartered CLI’s funds under management in its focus market of South Korea to S$3.1bn (£1.8bn).
As part of expanding its footprint into South Korea, CLI has formed a strategic partnership with Korea Investment & Securities (KIS), a subsidiary of a major financial conglomerate Korea Investment Holdings.
They will jointly manage PEF as co-general partners.
CLI holds an 11 per cent sponsor stake in PEF. This, said the company, is part of its “asset-light strategy to grow its funds under management while keeping strong alignment with investors”.
So far PEF has deployed a KRW 40 billion loan for the development of a data centre in Guro, a key data centre cluster in the west of Seoul, five kilometres from Yeouido Business District, that hosts several leading cloud companies as well as IT and financial companies.
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“The strong institutional participation in PEF is testament to the network and trust CLI has built over more than 20 years of operating in the country,” said Matthew Sohn, CLI’s CEO for Korea.
“Leveraging CLI’s deep understanding of South Korea’s real estate investment landscape across multiple asset classes, we are able to expand our suite of fund products and identify suitable investment opportunities to meet investors’ demand.”
CLI has been growing its private credit business and its entry into South Korea’s private credit segment is in line with this.
South Korean banks have been reducing their proportion of real estate loans in their portfolio, the asset manager points out, creating opportunities for private lenders.
“Through our strategic partnership with KIS, the combination of our deal-sourcing, fund management and private credit expertise will position PEF for success,” added Sohn.
“We see strong potential to scale our private credit portfolio in South Korea and remain committed to delivering long-term value for our capital partners.”
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