Koramco Asset Management, Overseas Investment Assets 4.8 Trillion Won... 'Strength in Risk Management'

Expansion of Overseas Real Estate Assets Under Management
Contrasting Moves Draw Attention Compared to Competitors

Koramco Asset Management increased its overseas real estate assets under management (AUM) to a total of 4.8 trillion KRW last year, showing a contrasting approach compared to its competitors. This contrasts with the majority of domestic asset management companies that hesitated to invest in overseas real estate due to the impact of major interest rate hikes last year.

According to the asset management industry on the 26th, this year Koramco Asset Management raised approximately 400 billion KRW in new funds through the establishment of five funds, including the senior loan fund "Koramco UK Real Estate Fund No. 1," secured by the UK headquarters of Future Electronics, the world's fourth-largest electronics supplier, and the loan-type fund "Koramco US Debt JV No. 3" managed by the US real estate specialist PCCP.

They operate mainly through high-quality real estate secured loan funds and fund-of-funds via local general partners (GPs), rather than direct overseas physical real estate investments. The risk has been reduced by focusing on products that can expect stable mid-level dividends rather than high returns.

Stability and predictable returns are considered strengths of Koramco Asset Management. They adhere to risk management principles and invest only in assets with minimal economic impact and guaranteed stable cash flows. Examples include the purchase of student dormitories at the University of Texas and mezzanine loan funds for Amazon logistics center development.

Since 2018, overseas real estate investment has grown to exceed domestic investment scale. Based on abundant liquidity, the overseas market has been attractive to investors seeking new investment destinations. Most products aimed for high capital gains through asset sales after fund maturity rather than stable income gains. Recently, some investment products have incurred losses due to declining asset values.

An industry insider said, "Since 2010, many asset managers have ventured into overseas investments, judging the domestic real estate market to be saturated," adding, "It is true that difficulties have been experienced recently."

Koramco Asset Management’s overseas business portfolio is composed of ▲loan-type 51%, ▲core physical 31%, ▲value-add 6%, and ▲development 12%. This differs from the domestic real estate investment strategy, which shows strengths in industrial real estate development and pre-purchase based on synergy with its parent company specialized in real estate development and management. It is a two-track strategy separating domestic and overseas markets.

Koramco Asset Management is a subsidiary of Koramco Asset Trust, which has held the number one market share in the domestic private REITs market for 23 years. It manages approximately 13.4 trillion KRW in cumulative AUM. Since starting overseas business in 2015, it has managed about 5 trillion KRW in overseas assets. Recently, it established an overseas inbound department to increase contact points with foreign investors interested in domestic real estate investment.

Park Hyung-seok, CEO of Koramco Asset Management, said, "Koramco’s overseas investment strategy is to secure assets that can generate stable returns across economic cycles while anticipating value appreciation." He added, "We are enhancing investment stability by collaborating with overseas asset managers who are well-versed in local conditions."

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