The National Pension Service of Korea plans to form a dedicated team to expand its investments in real estate platforms.
According to PERE's sources, the investor has established a dedicated team to oversee investments in the real estate platform around the world. Led by David J. S. Kim, the team currently has three professionals based at NPS' headquarters in Jeonju, South Korea, and one in its Singapore office. NPS plans to hire two more external investment professionals with experience in both private equity and real estate by the end of the year as part of a larger plan for strategic expansion, according to the sources. Both new hires will be based in Seoul. The team was established in January, but PERE's understanding is that its developments have not been previously reported.
Prior to his promotion, Kim was based in London and most recently served as a senior portfolio manager at NPS, responsible for both listed and private real estate investments, according to his LinkedIn profile. Based in Seoul, he will report directly to Jun Ahn, head of real estate at NPS.
PERE understands that the team will focus primarily on real estate platform investments but will also explore listed real estate. The investor, which has a dedicated team, will take a more active role in platform investing, including investing directly in GP shares, operating platforms and setting up new platforms with marketplace partners, the people said. For now, the pension fund plans to invest primarily in platforms targeting niche sectors such as student accommodation, data centers and healthcare, as these sectors have high growth potential and it plans to invest in these areas.
Before launching a business focused on the strategy, NPS had been indirectly investing in real estate platforms through separately managed accounts and funds since 2013, according to sources. Direct investments in real estate platforms have been made by its private equity arm, including a partial investment in San Francisco-based real estate firm Stockbridge in August 2023. In the real estate sector, NPS has about $10 billion in assets under management invested in platforms and listed properties.
However, with the creation of the dedicated business, the investor's real estate arm will now be able to make direct investments on the platform. NPS hopes that the added capacity will give investors more flexibility to seize attractive real estate investment opportunities, the people said. The pension fund is part of a larger trend among global institutional investors to pursue more platform investments to improve risk-adjusted returns over the long term, the people added.
Indeed, some of the biggest real estate investors, including APG Asset Management in Europe, CPP Investments in North America and AwareSuper in Australia, are actively pursuing opportunities in real estate platforms.
APG is a shareholder in Asian logistics giant ESR and in 2021 launched Asian healthcare real estate specialist CBC Healthcare Infrastructure Platform with private equity firm CBC Group. CPP Investments last month acquired London-based Nido Living to set up a new student accommodation platform in Europe, while Aware Super's European property investments are all platform investments and include UK home builder Get Living, Dutch apartment hotel chain CityID and Spanish housing platform Vivenio Residential Sosimi.