South Korea's Public Officials Benefit Association (POBA) has decided to invest around €100 million ($120 million) in Kadans Science Partner, a Netherlands-based life sciences real estate developer, to sharpen its focus on niche sectors in real estate.
POBA will be buying an unspecified stake in the real estate arm of AXA Investment Managers (AXA IM) through its $300 million separately managed account (SMA), according to financial industry sources on July 11. The SMA is run by Kyobo AXA Investment Managers Co., a Korean joint venture of the French insurance group.
Late last year, AXA IM had acquired Kadans Science from Oaktree Capital Management, a US investment company, for €1.5 billion. The French investment firm is now selling down half of its stake in the Dutch real estate developer to pension funds and other investors.
The shares drew over three times more bids than the €750 million on offer. Given the competition, the exact size of POBA's investment will be determined later on.
Kadans Science develops, manages and leases office and research buildings in Europe, running 20 life science laboratories and about seven real estate developments across Europe, including the Netherlands, UK and Germany.
For the $300 million SMA run by Kyobo AXA, POBA focuses on logistics and data centers, which have been emerging as mainstream assets from the niche since the global pandemic began. The SMA will participate in other AXA IM-led investments.
Last month, POBA re-upped a separate SMA fund, established in 2017, with a commitment of 270 billion won to diversify into life science buildings, last-mile distribution centers and student housing facilities in Europe.
In an interview with Market Insight last month, POBA's Chief Investment Officer Jang Don-hun said that logistics and data centers, research labs and communication towers are transforming from the niche in the alternative investment market into mainstream assets, driven by technological development.
The $15 billion pension fund for South Korean provincial government employees are also shifting towards SMAs to speed up capital deployment and gain more control of investments.
Life science buildings are seen as immune to the working-from-home trends. The bioindustry employs large numbers of R&D staff who need to work in designated laboratories. Given the long period of time it takes to undertake life science research, their laboratories show a low vacancy rate compared to other office buildings.
Write to Jung-hwan Hwang at jung@hankyung.com
Yeonhee Kim edited this article.
POBA CIO (second from left), Teachers' Pension CIO (center), SEMA CIO (second from right), Hyundai Marine & Fire Insurance executive director (far right) South Korea's Public Officials Benefit Association (POBA) has earmarked over 1 trillion won ($900 million) for new real estate investment
Public Officials Benefit Association's (POBA) CIO Jang Dong-hun Rapid technological change that is blurring the lines between industries has altered the definition of asset classes, forcing investment managers to break from their traditional approach to asset allocations, said the chief investm
(Getty Images Bank) South Korea's Public Officials Benefit Association (POBA) is targeting life science buildings, last-mile distribution centers and student housing facilities in Europe for its latest commitment of 270 billion won ($240 million) to a separately managed account (SMA).It is POBA