An Australian institutional investment manager is partnering with Korea-based Samsung Asset Management to form a global infrastructure debt fund.
The US$480 million fund will be jointly managed by IFM Investors and Samsung Asset Management to invest in overseas infrastructure debt assets on behalf of Korean institutional investors.
Samsung Asset Management president and chief executive Koo Sung-hoon said he welcomes the partnership with IFM in a time when the global infrastructure market is expected to grow.
"With ageing infrastructure in developed markets needing replacement, and tougher regulations on environment; as well as increasing demand for infrastructure in emerging countries with growing populations and rapid urbanisation, the global infrastructure market is expected to continue to grow," Sung-hoon said.
The chief executive added he expects the collaboration to offer stable returns to local institutional investors who are "diversifying their investments to overseas alternatives amid the current low interest and low growth investment environment."
The fund will primarily target infrastructure assets in countries in North America, Europe and Australia with minimum A- sovereign credit ratings. It will invest in five main sectors - Public Private Partnerships (PPPs), power, renewables, utilities and mid-stream, where investment risk is minimised through government subsidies and long-term contracts.
Four Korean institutional investors have contracted a combined US$480 million in the fund.
IFM Investors chief executive Brett Himbury said the partnership was an extension of the strong trading relationship that exists between Korea and Australia which would benefit Australian investors.
"Korea is Australia's third largest trading partner and this collaboration in financial services is a logical extension of the strong relationship that exists between our two countries," Himbury said.
"It also benefits Australian investors by providing an additional source of capital from like-minded institutional investors, further increasing access to global investment opportunities and adding to member returns.
"We are excited to announce the global infrastructure debt fund for institutional investors in Korea together with Samsung Asset Management, and we look forward to a continued long-term commitment to Korea."
IFM Investors is owned by 28 Australian not-for-profit superannuation funds and currently has A$81 billion under management.