Several South Korean institutional investors, including insurers and mutual aid organizations, have invested a total of KRW200 billion (US$178.8) million in an infrastructure fund managed by global investment firm Macquarie Group.
Meritz Fire & Marine Insurance, ING Life Insurance Korea, Korea Teachers’ Credit Union, Public Official Benefit Association, and several others have invested between KRW50 billion and KRW70 billion each to participate in the fund.
The Macquarie-led fund aims to raise an annual rate of return of around 10%, reports Pulse News. It aims to back the construction of infrastructure in North America, particularly in the transportation, energy, harbour, airport, and telecommunications sectors.
The Korean firms’ decision to invest in North American infrastructure was influenced by the growth of the sector, which surpassed KRW800 trillion in the past five years. The investments will be made indirectly through a local fund managed by Truston Asset Management Co.
An unnamed source from one of the investing firms told Pulse News that the population of major cities in the US and Canada is expected to grow until 2040, spurring demand for infrastructure development. Both central and regional governments are short of capital, so foreign private investment is needed to fill the gap.
So far, Macquarie has invested US$8.48 billion in 28 assets across four investment funds globally. It has earned an internal rate of return of over 13% from 10 assets.
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