SEOUL, KOREA - Teachers' pension funds of the United States and Korea will jointly create an overseas alternative investment fund worth US$1 billion. According to financial investment industry sources on October 29, the Korean Teachers' Credit Union will form an investment fund in partnership with America's Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA–CREF) early next month. The two funds will chip in about 500 billion won each to invest in alternative investment assets in the areas of real estate and social overhead capital.
The Korean Teachers' Credit Union has assets of $22.8 billion under management as of the end of June this year while TIAA–CREF has $844 billion assets under management.
A financial investment firm official commented, "The alternative investment fund to be created by the two teachers' pension funds will seek mid-level risk and mid-level returns with about 6 percent of returns a year." He added that the fund may invest mostly in senior debt and mezzanine debt in order to minimize the risk.
Article provided by The Korea Economic Daily
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