Lee Joo-su, Head of NH Nonghyup REITs, "Nonghyup Financial Group to Focus on ESG Investment"

[Asia Economy Reporter So-yeon Park] NH Nonghyup REITs Management (hereinafter NH REITs) is recruiting experts in eco-friendly alternative investments to become the ESG (Environment, Social, Governance) investment hub for the entire Nonghyup group. Having recently completed registration as a professional private equity collective investment business, NH REITs plans to make its debut in the private equity fund market this year by raising a large-scale eco-friendly project fund.

Lee Joo-soo, Head of Investment Management Division 2 at NH REITs, who was recently recruited, told Asia Economy, "Nonghyup has major players in alternative investments across mutual finance, life insurance, non-life insurance, securities, banking, capital, and savings banks," adding, "We will strive to introduce good ESG-related projects such as renewable energy to affiliates and the market."

Lee, who majored in Resource Engineering at university, began his career in overseas resource development at Daewoo Corporation (now POSCO Daewoo), a general trading company. He later transformed into a certified public accountant, handling audit and advisory services related to energy, infrastructure, and corporate finance at Samil Accounting Corporation. For about 15 years thereafter, he worked in asset management, dealing with practical asset fields such as resource development, energy, infrastructure, and real estate. He has worked at Korea Investment Management, Samchully Asset Management, Hanwha Asset Management, and JB Asset Management.

Currently, Lee is preparing four project funds considering the investment demands of Nonghyup affiliates. Three of these are related to renewable energy fields such as hydrogen fuel cells and solar power plants, and the remaining one is an LNG power plant. He explained, "NH REITs has quickly established its position in the market," adding, "We will discover new businesses in infrastructure and energy, which have been somewhat challenging in the REITs sector, and create synergy with REITs." He also said, "We will supply investment targets to areas within Nonghyup such as mutual finance, life insurance, and non-life insurance that require investment, and create a virtuous cycle within the group through collaboration with securities and asset management."

The most advanced project among these is the hydrogen fuel cell power plant project fund, which produces electricity and heat by reacting hydrogen and oxygen. The scale of this domestic project is in the several hundred billion KRW range. Lee stated, "The overall trend is shifting towards renewable energy along with ESG," and added, "Since this aligns with social demands and the group's direction, we plan to invest heavily in eco-friendly sectors going forward."

As a strategy to secure quality deals in the energy sector, they also plan to utilize a pre-investment methodology based on parent company guarantees before permits are obtained. He explained, "For eco-friendly investment projects such as solar power conducted by highly creditworthy large corporations, we plan to strategically use a method of pre-investing by obtaining guarantees from the parent company at the pre-permit stage, and after permits are granted, making large-scale additional investments based on the initial investment." Early-stage projects of the fund will proceed in a project-based manner, and as successful records accumulate, a blind fund approach will be combined to expand the overall scale.

He said, "Although vaccine supply this year is a turning point and inflation, interest rate hikes, and exchange rate volatility may pose risks, real asset investments can serve as a risk diversification tool. We will design and supply quality projects to the market considering financial market risks."