"Blackstone and KKR are entering the race for debt obligations of Korean pension funds in real estate."

Four international investment companies - Blackstone, KKR & Co., Goldman Sachs and Starwood Capital Group - have been selected by the South Korean Government Employees Pension Service (GEPS) to manage overseas real estate debt.

Candidates will present their presentations, after which GEPS will select two firms and allocate them combined amounts up to $70 million, that is, $35 million each. The focus for80% of these two funds will be real estate in Europe or North America, excluding non-performing loans and problem assets. Each fund should be communal and have a limited term, not exceeding15 years, with the possibility of extension and an investment period of up to six years. The target profit rate ranges from7% to12%.

In June of this year, GEPS selected Apollo Global Management, Warburg Pincus, and EQT Partners as its first foreign funds for transactions involving the purchase and growth of assets.

GEPS, founded in1982, manages assets worth6.2 trillion won ($4.7 billion) at the end of2022.35.2% of the assets are in alternative investments,35.5% in government bonds, and24.4% in government stocks. The pension fund for government employees incurred losses of4.4% from investments last year. Alternative investments yielded a profit of10.2%, while government bonds and stocks suffered losses of7.7% and18.9% respectively due to increased interest rates and deteriorating geopolitical conditions.