US$9.1 bil Korean fund eyes Europe student housing

SEOUL (Sept 29): Student housing in Europe and Australian infrastructure are luring global funds out of their comfort zone, as a South Korean manager of local government employee savings joins peers around the world getting creative overseas in search of better returns.

Institutional investors from Seoul to New York are increasingly on the prowl for alternative assets, as low interest rates at home make it harder to meet promised payouts. In the latest example, South Korea’s Public Officials Benefit Association is considering putting money into a fund that invests in student housing in Europe along with other globally prominent pension managers, according to Chief Investment Officer Jang Dong-hun.

The fund targets annual returns of 5%, more than double South Korea’s 10-year sovereign bond yield of about 2.4%. That underscores the pressure the country’s investors face to wade into new areas, as a wealth fund and another pension fund have also stepped abroad more this year.

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