South Korea’s public pension fund, Public Officials Benefit Association (POBA), has made a $100-million capital commitment to a fund managed by US-based commercial real estate lender 3650 REIT.
3650, which originates and manages portfolio loans for institutional investors, said POBA’s commitment is for its “bridge and event-driven” (BED) lending strategy in the US.
BED focuses on shorter-term loans for borrowers pursuing ground-up construction, acquisitions, repositionings, recapitalisation, or the restructuring of partnerships.
“This strategic capital commitment is yet another testament to the strength of 3650’s lending approach, which continues to garner attractive, risk-adjusted returns for our institutional investors around the globe,” said 3650 REIT co-founder and managing partner Jonathan Roth.
3650 REIT, which is headquartered in Miami and has offices in New York, Los Angeles, Dallas, Atlanta, Nashville and Washington D.C, holds nearly $3 billion in assets under management and has a servicing platform of $13.5 billion.
The firm originates portfolio loans on behalf of its institutional partners in a broad swath of US markets and offers lending products across the property life cycle.
3650 REIT said POBA’s commitment to its BED strategy followed commitments from other institutional investors, including the California State Teachers’ Retirement System (CalSTRS) and Mubadala.
POBA was established in 1975 as a public pension fund for South Korean public officials. It currently manages $16 billion in assets and has become an active investor in alternative assets in the past few years.
Last year, POBA and CalSTRS jointly invested $235 million in two multifamily assets in the US – The Buchanan, a 15-story building in New York, and The Post Apartments in Seattle.
It also committed to invest more than $105 million in American commercial properties in collaboration with Shinhan Financial Group in February. POBA and Shinhan earlier said will seek stable returns with more than 6% of an annual internal rate of return (IRR) while holding a portfolio of lower-risk commercial mortgage-backed securities of 50% of loan-to-value (LTV).
