Korea’s GEPS seeks PE secondaries managers

Korea’s Government Employees Pension Services (GEPS) last week invited bids from asset managers to run two global private equity secondaries portfolios worth $50 million each.

The mandates are for commingled blind funds for a total of $100 million with terms of 10 years, with an option of a one- or two-year extension, and with investment periods of five years, also with an option of a one- or two-year extension. The deadline for submission is May 12 (this coming Thursday).

The W6 trillion ($5.2 billion) state fund has not yet decided on what the general partners' commitment and management/performance fee structures will be. 

The GPs must have: at least two years in the global PE secondaries business, with relevant internal control systems, including a risk management and compliance function independent from the investment function; and total funds invested in PE secondaries of at least $500 million.  

The planned mandates form part of GEPS’ move to revamp its asset allocation. The fund aims to increase its alternatives allocation from 16% now to 20% by the end of 2016 and nearly double its foreign asset exposure to 30% from 16% by 2020, with a view to boosting returns, as reported.

GEPS also plans to adopt a new, longer-term investment approach. It is devising a system of evaluating and analysing managers’ investment performance over intervals of at least two years.

The deadline for submission of the first proposal is 6pm Korea time on May 12. The short-listed candidates will be notified by May 18 if they have qualified for the second evaluation. The final short-listed managers will be notified of the second evaluation’s results by May 26. On-site due diligence will be conducted from June 8 to 10, with the final two winners to be announced on June 15.

More details can be obtained from Ryu Songheon at [email protected] or +82 2 560 2903, or from Kim Yoojin at [email protected] or +82 2 560 2175.