Koramco Selected as Manager of 300 Billion KRW Blind Fund for Administrative Mutual Aid Association

Blind Capital in Alternative Investments Exceeds 3 Trillion Won
300-Fold Growth in 4 Years Since Initial Setup

[Asia Economy Reporter Minji Lee] Coramco Asset Trust announced on the 1st that it has been selected as the manager of a blind fund worth 300 billion KRW established by the Korea Local Government Officials’ Mutual Aid Association (hereinafter referred to as the Mutual Aid Association) and will sign an investment contract within this week.

Koramco Asset Trust's Galleria Center City operated through a blind fund, panoramic view

With this contract, the amount of blind fund management by Coramco Asset Trust and its subsidiary Coramco Asset Management has exceeded 3 trillion KRW based on equity capital. This is the largest scale of alternative investment blind fund management in South Korea.

The blind fund to be managed by Coramco Asset Trust on behalf of the Mutual Aid Association aims for an average annual dividend of around 5% and an IRR (Internal Rate of Return) of over 7%, investing in office buildings in the Seoul and Bundang business districts. The management period is a total of 13 years.

Based on the investment guidelines of the Mutual Aid Association, about 60% of the total committed amount will be allocated to large offices following a core strategy (stable investment), and the remainder will focus on midsize offices with a value-add investment strategy. The specific investment schedule and target assets remain blind.

A blind fund is an active fund that collects investment capital first without specifying the investment target, then discovers investment opportunities at the discretion of the fund manager and proceeds with investments quickly. Compared to the traditional project fund method, which recruits investors after deciding on the investment target, it has higher investment efficiency and relatively higher target returns. This is why blind investments have been expanding recently in the investment industry.

In November last year, the Mutual Aid Association conducted a public offering targeting alternative investment managers with assets under management of over 300 billion KRW to select a domestic office blind fund manager, ultimately selecting Coramco Asset Trust.

Kim Cheol-gyu, head of Coramco Asset Trust, said, "The proportion of blind funds, which are based on trust in the expertise of the fund manager, is gradually increasing in the real estate investment industry," adding, "We will lead the blind fund market by adding investment efficiency on top of stable dividends to achieve results beyond the target returns."

Meanwhile, Coramco, which set up the first alternative investment blind fund of 10 billion KRW in South Korea in 2016, manages the largest domestic blind funds of about 3 trillion KRW entrusted by organizations such as the Teachers’ Mutual Aid Association, Housing and Urban Fund, and the National Agricultural Cooperative Federation. It has led the domestic alternative investment blind fund market by achieving about 300 times growth in four years since its initial setup.

This content was produced with the assistance of AI translation services.