NH Investment & Securities Launches Korea's First Real Estate Institutional Private Equity Fund Management

New Business Model Entry Following Capital Market Act Amendment
Advocating Total Solution Mid-to-Long-Term Business Model Beyond Short-Term Business

NH Investment & Securities announced on the 28th that it has established and commenced operation of the industry's first real estate institutional private equity fund (PEF) that manages the entire business process from deal sourcing to planning, financial procurement, operation, and sale (value enhancement).

The fund size is approximately 200 billion KRW, and it has begun full-scale investment execution by reviewing 5 to 6 investment assets. Institutional private equity funds were launched following the amendment of the Capital Markets Act in April 2021, which allowed PEs to engage in real estate asset management. These funds raise capital from institutional investors such as financial companies rather than individuals. This fund has made joint investments with NH Nonghyup Financial Group and others, accounting for more than 60% of the total capital, with additional funding from real estate developers and mutual aid associations. Unlike asset managers handling general private equity funds, it raises capital based on the abundant financial strength of Nonghyup-affiliated companies, enhancing operational autonomy and strengthening group-linked synergies to enable smooth business execution. In particular, the main investment strategies are Value-Add, which increases real estate value through income enhancement methods such as remodeling and expansion to raise rental income, and Opportunistic, which maximizes opportunity costs by purchasing land for development or acquiring distressed assets at low prices and completing construction. In the future, the fund plans to invest in various asset classes that meet investment criteria, including domestic office facilities, commercial facilities, and pre-sale projects.

Since real estate PEFs require long-term perspectives and comprehensive responsibility for the entire business, the complexity of the work is high, making the capabilities of fund managers very important. To this end, NH Investment & Securities established the Real Estate PE Department at the end of last year through organizational restructuring, staffed with personnel possessing specialized real estate finance expertise. The Real Estate PE Department plans to adopt a total solution mid- to long-term business model, moving away from short-term businesses such as brokerage, financial arrangement, and sell-down. Hyunjin Ahn, head of the Real Estate PE Department at NH Investment & Securities, stated, "Global investment banks (IBs) have strengthened their market dominance by directly establishing and managing real estate funds based on abundant financial resources and specialized organizations. Through this first domestic real estate PEF, we aim to secure market dominance in Korea and lay the foundation to expand the IB division's business scope."

NH Investment & Securities has accumulated expertise across the entire real estate investment sector by successfully completing mega deals such as the remodeling project of City Center Tower (formerly Ssangyong Cement Building), the approximately 2 trillion KRW Park One project, Brighton Yeouido, and Ansana Residence (formerly NH Investment & Securities headquarters).

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