The Republic of Korea’s $750 billion National Pension Service, the third largest pension fund in the world, has acquired a minority stake in U.S.-based private-equity real estate investment company Stockbridge Capital Group LLC. Financial terms of the deal were not disclosed.
“NPS is an ideal partner to support the continued growth of our firm,” said Terry Fancher, Stockbridge’s CEO and founder, in a statement. “NPS’ investment in Stockbridge will assist us in completing our corporate reorganization and provide new capital for our continued growth while allowing us to execute independently.’’
The pension giant is acquiring the minority interest in the firm through a separate account investment program administered by Blue Owl Capital Inc., while Berkshire Global Advisors was Stockbridge’s financial advisor.
The NPS and Stockbridge have a pre-existing working relationship, having formed a joint venture in December 2020, during the COVID-19 pandemic, to acquire core logistics properties in the U.S.
Real estate accounts for 5% of the NPS’ total asset value at 49.5 trillion won (approximately $38 billion) in assets, as of the end of the second quarter, a 58% increase from the 31.3 trillion won worth of real estate assets the portfolio held in 2020. The vast majority of the pension fund’s real estate portfolio is held in assets abroad, with the Americas drawing the largest amount of investment at 38.8%, followed by Europe at 24.8% and Asia at 20.5%. Only 13.5% of the real estate portfolio is invested domestically.
San Francisco-based Stockbridge also announced a reorganization of its two business units: Stockbridge Platform Business and Core and Value Advisors.
According to the company’s website, its core portfolio construction seeks out high-quality, stabilized properties in markets with historically strong performance, while its core investment strategy is income-focused and aims to produce the highest returns with low volatility.
Stockbridge’s value-added portfolio construction focuses on “non-stabilized” assets in which a higher percentage of total return is generated by growth; however, returns are subject to greater volatility. It also aims to add value through active management strategies, including additional capital investment, leasing, recapitalization, renovation and redevelopment.
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Tags: Berkshire Global Advisors, Blue Owl, Mergers and Acquisitions, National Pension Service, Private Equity, Real Estate, South Korea, Stockbridge Capital Group