South Korea's national pension fund said Sunday it has entrusted more than 1 trillion won (US$898.5 billion) to overseas property investment managers as part of the fund's efforts to diversify its investment portfolio.
The National Pension Fund (NPS) agreed with Pramerica Real Estate Investors, an affiliate of Prudential Financial Inc., to entrust 440 billion won under the property investor's management, according to the local pension fund manager.
The U.S.-based company primarily invests in office buildings and residences in Japan, Australia, China, Singapore and other Asian regions and the NPS expects a 10 percent return on the entrusted fund, the NPS said.
The NPS also forged a deal last September to entrust 330 billion won to Townsend Group, a U.S.-based real estate investment consulting firm based in Cleveland, Ohio, while assigning 440 billion won to Britain's Rockspring Property Investment Managers, the fund said.
All three deals last for three years and are expected to generate returns of 10 percent or more, it said.
The new contracts are designed to diversify its overseas property investment, previously focused on global mainstream property spots.
"The NPS has mainly bought top-class buildings in London, Sydney and Paris for the last two years but growing competition prompted us to diversify overseas property investment," an NPS official said.
The NPS, the world's fourth-largest pension fund manager, has pushed to diversify its financial assets-heavy portfolio, acquiring overseas real-estate assets, including a shopping mall in France and office buildings in the United States.