CapitaLand Investment Limited (CLI), a prominent global real asset manager, has successfully closed its inaugural South Korea private credit fund with an equity commitment of KRW 180 billion (S$169.2 million), bringing its total funds under management in South Korea to S$3.1 billion. The CapitaLand Korea Investment No. 1 Private Equity Fund (PEF) will focus on investments in construction, asset-backed, or mortgage loans across diverse asset classes such as data centers, lodging, office spaces, and residential properties in key cities across South Korea.
CLI has formed a strategic partnership with Korea Investment & Securities (KIS), a subsidiary of a major financial conglomerate Korea Investment Holdings, to jointly manage PEF as co-general partners. CLI holds an 11% sponsor stake in PEF, which is in line with its asset-light strategy to grow its funds under management while keeping strong alignment with investors.
The PEF has committed a KRW 40 billion loan to develop a data center in Guro, Seoul, a prominent data center hub located five kilometers from the Yeouido Business District. The area is home to several leading cloud, IT, and financial companies, creating a favorable demand-supply environment. With 30 megawatts of secured power, the data center is set to meet growing demand upon completion in the third quarter of 2028. SK Ecoplant, with an A- credit rating, will manage the project and provide a completion guarantee. KT Cloud Corp., a subsidiary of KT Corp., will lease and operate the facility.
Mr Matthew Sohn, CLI's Chief Executive Officer for Korea, said: "The strong institutional participation in PEF is testament to the network and trust CLI has built over more than 20 years of operating in the country. Leveraging CLI's deep understanding of South Korea's real estate investment landscape across multiple asset classes, we are able to expand our suite of fund products and identify suitable investment opportunities to meet investors' demand".
"CLI has been fast-tracking its growth in private credit and its entry into South Korea's private credit segment is in line its investment strategy that focuses on the theme of 'Disruption'. Despite the gradual decline in interest rates, South Korean banks have been reducing their proportion of real estate loans in their portfolio[3]. As traditional lenders in South Korea become increasingly conservative, the widening funding gap creates opportunities for private lenders. Through our strategic partnership with KIS, the combination of our deal-sourcing, fund management and private credit expertise will position PEF for success. We see strong potential to scale our private credit portfolio in South Korea and remain committed to delivering long-term value for our capital partners", added Mr Sohn.