Samsung Asset Management and IFM Investors have formed a US$480 million ($640.2 million) fund to invest in overseas infrastructure debt assets on behalf of Korean institutional investors.
The fund will primarily target infrastructure assets in North America, Europe, and Australia with minimum A- sovereign credit ratings.
Samsung AM and IFM said the fund would invest in public private partnerships, power, renewables, utilities, and mid-stream where investment risk was minimised through government subsidies and long-term contracts.
Samsung AM president and chief executive, Koo Sung-hoon said: “With ageing infrastructure in developed markets needing replacement, and tougher regulations on environment, as well as increasing demand for infrastructure in emerging countries with growing populations and rapid urbanisation, the global infrastructure market is expected to continue to grow”.
“We expect with this collaboration to be able to offer stable returns to local institutional investors who are further diversifying their investments to overseas alternatives amid the current low interest and low growth investment environment,” he said.
Also commenting, IFM chief executive, Brett Himbury said being owned by superannuation funds, IFM’s infrastructure debt investment philosophy was aligned with institutional investors’ objectives.
“Korea is Australia’s third largest trading partner and this collaboration in financial services is a logical extension of the strong relationship that exists between our two countries,” Himbury said.
“It also benefits Australian investors by providing an additional source of capital from like-minded institutional investors, further increasing access to global investment opportunities and adding to member returns.”