KTB Asset Management Accelerates Alternative Investments... 550 Billion KRW Invested in US Rental Housing

Participation in US Bridge Invest Fund... Stake Reaches 23%
"Korean Institutional Investors' Influence Expected to Increase"

[Asia Economy Reporter Minwoo Lee] KTB Asset Management has established a fund worth 550 billion KRW that invests in U.S. rental housing (multifamily) loan-type products.

On the 10th, KTB Asset Management announced that it has created a 550 billion KRW specialized private equity fund investing in the blind fund "Bridge Debt Strategies Fund No.4" by Bridge Investment Group, the largest multifamily specialist operator in the U.S. Eight domestic institutional investors participated, targeting an annual return of 9-11%.

Bridge Debt Strategies Fund No.4 is a 2.4 trillion KRW fund involving sovereign wealth funds from North America and the Middle East, as well as overseas institutional investors. Over the next three years, it plans to invest in multifamily (rental housing) loan bonds in major U.S. cities and products based on them. It mainly invests in securitized bonds backed by senior loans with a loan-to-value ratio (LTV) around 70%, secured by multifamily portfolios housing the middle class in major U.S. cities, driven by new job creation and increasing migration. Multifamily properties were recognized as low-risk assets during the financial crisis due to low vacancy rates and stable rental income.

About 50% of the fund's assets will be invested in K-Deal products issued by Freddie Mac, the U.S. government-sponsored mortgage entity, based on senior multifamily loans. Since its launch in 2009, K-Deal has issued 420 billion USD (approximately 482 trillion KRW) worth of securities, with a cumulative loss rate of only 0.004%.

As a result, the total assets under management (AUM) of KTB Asset Management's alternative investment division, established in 2016, have reached 3.5 trillion KRW. A KTB Asset Management official said, "It is very unusual for Korean capital to participate at a scale of one-quarter (about 23%) in overseas real estate funds," adding, "This will be a good opportunity to increase the voice of Korean institutional investors in fund management and co-investment opportunities."

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