SEOUL-Korea's National Pension Service, which has invested in substantial European real estate in 2010 - mainly through London-based investment manager Rockspring - aims to reach more than 10% of total assets in various alternative assets by 2014. This implies allocation of another $11.9 billion to $13.5 billion in the next four years.
NPS will work with Townsend Real Estate in the US to commit up to $300 million to the US housing market and will also work in Asia and Europe with Prudential's investment manager Pramerica in seeking further property exposure. Total further short-term investment is up to $1billion for each region.
NPS's largest property deal to date was acquisition of HSBC's London HQ for $1.3 billion in November 2009. This year it bought, for around $660 million, the Sony Center in Berlin. In line with a two-year rotation, NPS in November appointed Lee Chan-woo as new CIO.
NPS figures for end-2008 show it had $202 billion equivalent in invested assets, of which $7.7 billion or 3.8% is in alternatives. The increase in alternatives by 2014 will come at the expense of cutting the domestic fixed income allocation below 60%, from 77.7%. It also aims to raise domestic equity holdings to over 20% of total, from 12.1%, overseas equity above 10% from 2.4%, and overseas fixed income to something under 10% from 4% of total around 24 months ago.
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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