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July 17, 2024

[Herald Interview] TIAA-owned asset manager eyes Korean investors’ appetite for alternative assets

PUBLISHED : July 10, 2024 - 16:12

UPDATED : July 10, 2024 - 16:12

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Nuveen's head of Korea institutional Chang Jae-ho (Nuveen)

Nuveen, the investment manager of the US Teachers Insurance Annuity Association with $1.2 trillion in assets under management, is seeking to broaden its investor base in the Korean market from big institutions to retail investors by launching funds to invest in unlisted medium-sized companies.

Retail investors are now seeking unconventional opportunities in the alternative market to expand their portfolios beyond their typical investment vehicles, such as stocks and bonds.

Chang Jae-ho, Nuveen's head of Korea institutional, expressed high expectations for the growing demand of Korean high-net-worth individuals for alternative assets, such as private equity and real estate, which have long been the near-exclusive purview of large institutions.

“Making alternative markets more accessible to individual investors is one of the top agendas for not only us but for many asset management companies,” he said during an interview with The Korea Herald on July 5.

“The Korean market is now at the starting point.”

To tap into this potential on the rise of retail investors, Nuveen signed a memorandum of understanding with Woori Bank and Woori Asset Management, subsidiaries of South Korea's Woori Financial Group for a strategic partnership on June 14.

In the partnership with Woori, Nuveen plans to launch a nontraded business development company to allow retail investors to invest in privately owned small or medium-sized businesses with EBITDA of less than $100 million.

“We have been providing such products to institutions only. The investment opportunities will be given to retail investors in the form of a nontraded BDC (through the collaboration with Woori),” he said.

Joining US TIAA in 2006, about eight years before the pension provider acquired Nuveen, Chang served as a portfolio manager for real estate investment. Now, he delivers investment solutions tailored to Korean institutional clients’ asset allocation needs.

While expanding fundraising efforts here, Nuveen also allocated its pan-Asian core real estate capital to Korean property assets, with three logistics centers located in Namyangju, Uiwang and Ilsan, all in Gyeonggi Province.

The Namyangju facility is a last-mile distribution center leased to e-commerce giant Coupang. The Uiwang one is situated in an inland container depot, one of the country’s five major regional logistics bases.

About 30 percent of the Ilsan facility is currently used as a data center.

“We are trying to discover investment opportunities in office and data center assets, which are fundamentally sound sectors while taking a cautious approach toward the logistics sector due to oversupply and decreasing demand after the pandemic-induced e-commerce boom fizzled,” Chang said.

But he ruled out the possibility of putting those logistics facilities up for sale for the time being.

“Since our goal is to return stable income to investors through rental income rather than making a quick profit by buying and selling properties, those are long-term investment assets,” he said.

By Park Han-na (hnpark@heraldcorp.com)

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