Koramco closes W134b fund to invest in pre-IPO REITs

Korean real estate investment firm Koramco Asset Management said Tuesday it has signed a combined 134 billion won ($109.5 million) in commitments to its two blind-pool funds to capitalize on the potential of the nation’s growing properties market.

Mainly targeting real estate investment trusts that eye initial public offerings here, the funds received commitments by undisclosed institutional investors and corporate investors. A REIT refers to a company that owns income-generating commercial real estate assets and distributes the income to REIT shareholders through dividends.

One of the two REIT-investing funds, with a commitment of 64 billion won, is designed to allocate 60 percent of its investments to a REIT by Koramco that eyes listing in the second half of this year. The rest of the commitment will go to REITs that plan to go public within a year. The fund has a four-year maturity.

The other fund, with a commitment of 70 billion won, will diversify the portfolio by the growth stage of REITs in a seven-year plan.

Both funds pursue at least 7 percent in annual return, Koramco said.

“The blind pool funds are expected to win investment opportunities that can generate dividends and capital gains by targeting REITs with high growth potential,” Lee Jae-gil, executive managing director of Koramco Asset Management in charge of blind fund and wealth management, said in a statement.

Founded in 2010 as a wholly owned arm of Koramco REITs & Trust, Koramco Asset Management has 3.84 trillion won in assets under management, as of Friday.

By Son Ji-hyoung (consnow@heraldcorp.com)