［Institution Perspective］Construction Workers' Mutual Aid Fund Assets Reach 5 Trillion Won...Signaling Investment in Prime Real Estate

The assets under management (AUM) of the Construction Workers’ Mutual Aid Association have surpassed 5 trillion won. The association plans to actively invest the increased assets in high-quality real estate project financing (PF) and the promising waste plastic recycling industry.

Lee Sang-min, Chief Investment Officer (CIO) of the Construction Workers’ Mutual Aid Association, recently told Asia Economy, "As of the end of last year, our assets under management exceeded 5 trillion won." The association’s assets have rapidly increased, nearly doubling over the past decade. The AUM, which was 289.6 billion won in 2004, grew sharply to 2.5889 trillion won in 2013 and reached 5 trillion won in 2023.

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Lee said, "Although interest rates are expected to be adjusted downward somewhat, they will not be adjusted as sharply as in the past," adding, "For the time being, we will focus on stable loan products and are considering ways to invest in senior non-performing loans (NPLs) by selecting good projects among real estate PFs."

Lee is a CIO with strengths in alternative investments such as real estate and infrastructure. He began infrastructure investments at the National Pension Service, including domestic projects like the New Daegu-Busan Expressway, and has experience in overseas real estate and infrastructure investments. At the Construction Workers’ Mutual Aid Association, he has delivered results in domestic and international infrastructure, real estate, and corporate investments.

The association plans to soon announce a public tender for selecting a delegated management company for a real estate loan fund. Lee stated, "We plan to announce the tender at the end of January or early February and invest about 200 billion won in four companies starting around April, after the general election." He explained that with the real estate market in recession and interest rates still high, now is the time for investors to distinguish the gems and invest in undervalued high-quality real estate.

In addition to real estate, the association will strengthen eco-friendly investments. Lee hinted, "We are also interested in plastic upcycling." Upcycling is a broader concept than recycling, involving redesigning or repurposing products.

Lee explained, "Due to climate agreements, laws in Europe have changed to mandate the use of PET bottles as upcycled products. Chemical companies must now supply upcycled products to export."

The European Union (EU) announced that from 2025, beverage PET bottles under 3 liters must contain at least 25% recycled plastic. Japan uses 26% of recycled PET materials annually in bottle manufacturing, and the United States uses 21% to make new PET bottles. Global beverage company Coca-Cola currently sells only 100% recycled PET products in eight countries, including Norway and Sweden.

He said, "Coca-Cola, which produces over 100 billion bottles annually, has established a strategy to replace PET bottles with upcycled products by 2030. The plastic upcycling market is opening worldwide, and there are companies with related technologies domestically, so we are considering investments."

Born in 1973, Lee graduated from Hongik University with a degree in Architectural Engineering and earned a master’s degree from the University of New South Wales’ School of Architecture and Built Environment. He began his career in 2005 at Doosan Heavy Industries’ Desalination Power BG MED team, then moved in 2006 to Korea Infrastructure Finance Advisory as head of the private investment project team, gaining experience in finance. He accumulated domestic and international infrastructure and real estate investment experience at the National Pension Service and has been with the Construction Workers’ Mutual Aid Association for about 12 years.

The Construction Workers’ Mutual Aid Association, affiliated with the Ministry of Employment and Labor, was established in 1997 to improve the welfare and secure the retirement life of construction workers. The association’s assets, which have been steadily growing since 1998, were recorded at 4.5911 trillion won as of the end of last year. Currently, the assets under management are about 5.2 trillion won. The assets are managed across financial investment sectors such as stocks and bonds, and alternative investment sectors including domestic and overseas real estate, private equity funds, and infrastructure.

Sangmin Lee, Head of Asset Management Division, Construction Workers' Mutual Aid Association

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