[Herald Interview] TIAA-owned asset manager eyes Korean investors’ appetite for alternative assets

Nuveen’s head of Korea institutional Chang Jae-ho (Nuveen)

Nuveen, the funding supervisor of the US Academics Insurance coverage Annuity Affiliation with $1.2 trillion in property underneath administration, is in search of to broaden its investor base within the Korean market from huge establishments to retail buyers by launching funds to put money into unlisted medium-sized firms.

Retail buyers at the moment are in search of unconventional alternatives within the various market to increase their portfolios past their typical funding automobiles, akin to shares and bonds.

Chang Jae-ho, Nuveen’s head of Korea institutional, expressed excessive expectations for the rising demand of Korean high-net-worth people for various property, akin to personal fairness and actual property, which have lengthy been the near-exclusive purview of huge establishments.

“Making various markets extra accessible to particular person buyers is likely one of the high agendas for not solely us however for a lot of asset administration firms,” he mentioned throughout an interview with The Korea Herald on July 5.

“The Korean market is now at the place to begin.”

To faucet into this potential on the rise of retail buyers, Nuveen signed a memorandum of understanding with Woori Financial institution and Woori Asset Administration, subsidiaries of South Korea’s Woori Monetary Group for a strategic partnership on June 14.

Within the partnership with Woori, Nuveen plans to launch a nontraded enterprise growth firm to permit retail buyers to put money into privately owned small or medium-sized companies with EBITDA of lower than $100 million.

“We’ve been offering such merchandise to establishments solely. The funding alternatives might be given to retail buyers within the type of a nontraded BDC (by the collaboration with Woori),” he mentioned.

Becoming a member of US TIAA in 2006, about eight years earlier than the pension supplier acquired Nuveen, Chang served as a portfolio supervisor for actual property funding. Now, he delivers funding options tailor-made to Korean institutional shoppers’ asset allocation wants.

Whereas increasing fundraising efforts right here, Nuveen additionally allotted its pan-Asian core actual property capital to Korean property property, with three logistics facilities positioned in Namyangju, Uiwang and Ilsan, all in Gyeonggi Province.

The Namyangju facility is a last-mile distribution middle leased to e-commerce large Coupang. The Uiwang one is located in an inland container depot, one of many nation’s 5 main regional logistics bases.

About 30 p.c of the Ilsan facility is at present used as an information middle.

“We try to find funding alternatives in workplace and information middle property, that are essentially sound sectors whereas taking a cautious strategy towards the logistics sector resulting from oversupply and lowering demand after the pandemic-induced e-commerce increase fizzled,” Chang mentioned.

However he dominated out the potential of placing these logistics amenities up on the market in the meanwhile.

“Since our objective is to return secure revenue to buyers by rental revenue somewhat than making a fast revenue by shopping for and promoting properties, these are long-term funding property,” he mentioned.

By Park Han-na (hnpark@heraldcorp.com)