National Pension Service of Korea Wagers Offices, Hotels Will Recover
The world’s third largest pension fund placed a $1 billion bet on public global real estate with asset manager Russell Investments.
The National Pension Service of Korea (NPS) has awarded a $1 billion global real estate mandate to Russell Investments, betting that offices, hotels, and other public properties will swing back after the world recovers from the pandemic.
The mandate will help the world’s third largest pension fund capitalize on the public real estate markets to complement its private real estate portfolio, as well as improve its risk-adjusted return, and diversify the fund, according to a statement from Scott Kim, head of the real estate investment division at NPS.
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One New York Plaza, One Madison Avenue and 605 Third Avenue top the list of largest real estate loans. (Brookfield, Wikimedia Commons, Fisher Brothers)
The 10 largest Manhattan loans recorded in December totaled $2.1 billion, a slight decrease from November’s total.
For the second month in a row (and the third time in four months), the biggest was a single-asset, single-borrower CMBS loan on an office building co-owned by Brookfield. The CMBS market produced three of the month’s top four, with the exception being a construction loan for SL Green’s next major office development.
Here were the borough’s largest real estate loans in December:
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New mandate focuses on listed real estate as COVID-19 vaccine alters outlook for the asset class
Russell Investments, a leading global investment solutions partner, announced today that South Korea s public pension fund, the National Pension Service (NPS), has partnered with the firm for US$1 billion global listed real estate mandate. This is the second Global Real Estate Securities (GRES) mandate awarded by NPS to Russell Investments as part of their longstanding relationship. We re very honored that our dynamic client NPS has extended their trust in our ability to deliver a beneficial listed real estate solution, said Global Chief Investment Officer
The risks of ESGâs rapid advance in Asia
After years of being in the shadows, sustainable investing is increasingly taking centre stage in Asia. Regional investors will need to assess their priorities and commitment.
Talk to any fund house of note today, and one of the first things they raise in conversation is their commitment to ESG.
Environmental, social and governance-friendly investments are fast becoming go-to product solutions. This in large part down to marketing – it’s good business to be a caring asset manager that can also offer good returns, instead of just the latter.
The emphasis is also a recognition of the way the wind is blowing. Governments and regulators across the world are pushing stewardship responsibilities and rules for companies to declare their environmental standards, both in their own businesses and, increasingly, in their supply lines.
Sovereign wealth funds have stepped up their private market investments after the coronavirus crisis, but with valuations still high despite a shaky economic backdrop there are questions about the prospects for future returns.
While funds have increased the portion of their outlay in public equities in 2020, private markets still account for the largest chunk of overall investment at $55.5 billion year to date, up from $35 billion last year after a pick-up in deals in the second half, according to the London-based International Forum of Sovereign Wealth Funds.
Current asset prices are still very high despite uncertain economic conditions, raising questions of whether 2020-21 deals will be a good vintage, said Will Jackson-Moore, global private equity, real assets and sovereign funds leader at consultancy PwC.