Korea Teachers Pension has committed US$50m (€44.6m) to LaSalle Investment Management’s latest US value-add real estate fund.
IPE Real Estate understands that LaSalle Income & Growth Fund VII, which was launched in 2015, has now received US$460m of commitments and is expected to have a final close in September.
It is Korea Teachers Pension’s first investment in the series of funds, which have invested an aggregate US$4.9bn since 1996.
An unidentified Japanese investor has also invested.
Jun-bun Park, head of client capital group for Korea at LaSalle, told IPE Real Estate that Korean investors are looking for stable income, having focused more recently on core property and debt.
“The trend we notice recently is that some major Korean institutions are looking for diversification because their existing portfolios are full of core assets,” he said.
“Core assets are getting even more expensive these days. Korean institutions are looking to go up the risk curve, and they are looking at value-add and opportunistic strategies.”
Park said the fund invests only in US real estate but there are no restrictions on locations and sectors. The focus, he said, will be on office, retail, logistics and multifamily sectors in major cities.
He said the fund has closed eight deals, and committed “the vast majority of the capital raised so far”.
To date, Lasalle has raised US$2bn from Korean institutions, including Korea Teachers Credit Union, and Scientists and Engineers Mutual Aid fund.
However, Park said all of the investors have different strategies. Teachers Credit Union, for instance, had invested in one of LaSalle’s European funds.
Park said the Japanese pension market is at “an early” stage of going overseas.
“They have a lot of money and when they start to deploy their capital, it will be big,” he said.
“They don’t many choices other than going global to digest their liquidity.”