Koramco eyes global assets of W5tr, propels expansion

Koramco Asset Management acquired a student dormitory, Villas on Rio, located within the University of Texas campus in Austin, through a joint partnership in October 2021. (Koramco Asset Management)

Koramco Asset Management, the nation's largest real estate investment firm, saw its overseas assets under management reach nearly 5 trillion won ($3.73 billion) in 2023, having garnered new investment funds worth 400 billion won amid a sluggish global real estate market.

The asset management firm announced Monday that it raised 400 billion won last year, bringing the volume of the foreign assets it manages on behalf of clients to more than 4.8 trillion won. This accounts for nearly 30 percent of the firm’s total assets under management, which total 13.4 trillion won.

Koramco proactively expanded its portfolio last year, launching five new funds, the firm said.

Newly established funds from last year include the Koramco UK Real Estate Fund No. 1, securing senior debt through mortgaging the headquarters of Future Electronics, the world’s fourth-largest electro-mechanical distributor, and securing the Koramco US Debt JV No. 3 debt fund through a partnership with US-based real estate asset manager PCCP.

The firm has been adopting a two-track approach in its domestic and overseas investment strategies. While the domestic portfolio focuses on development projects in the industrial real estate sector or forward purchases, the overseas portfolio concentrates more on ensuring stability through investing in debt or core assets in a risk-averse environment.

Working up a diversified portfolio to disperse risk is another tactic for the asset manager. Its overseas investments consist of debt (51 percent), core assets (31 percent), opportunistic (12 percent) and value-add real estate investments (6 percent).

While many domestic asset managers are facing losses from their aggressive overseas real estate investments in recent years, leveraging capital liquidity and taking advantage of the relatively low interest rates, Koramco said it was able secure a stable liquidity flow by investing in limited assets.

The investments include the acquisition of a student dormitory on the campus of the University of Texas at Austin (140 billion won) and a mezzanine debt fund for Amazon’s logistics center development project (120 billion won).

The asset manager, a subsidiary of Koramco REITs & Trust which is one of the top players in the private real estate investment trust field, first expanded into the foreign real estate market in 2015.

While its foreign portfolio has been seeing robust growth, the asset manager also plans to attract more foreign investments to Korea this year. It recently launched an overseas inbound team through a reshuffle implemented earlier this year, aiming to strengthen relationships with global investors.

"Koramco Asset Management has consistently pursued stabilized and secured profit despite the ups and downs of the global economy," said the asset manager's CEO Park Hyung-suk. “We will continuously study various real estate sectors to seize assets with the greatest potential by actively engaging with global partners.”

“Our utmost goal is to meet the investment goals of our clients. We will continue on our path as the most energetic and trustworthy asset management company by steadfastly building up our performances and track records.”

By Im Eun-byel(silverstar@heraldcorp.com)