Saemaeul Geumgo and Yuamco Establish Real Estate PF Fund Worth 500 Billion Won

▲ On the 24th, at the Saemaeul Geumgo Central Association building in Gangnam-gu, Seoul, Im Jin-woo, CEO of Credit Guarantee at Saemaeul Geumgo Central Association (right), and Lee Sang-don, CEO of Yeonhap Asset Management, are posing for a commemorative photo after signing an agreement to establish a fund for normalizing real estate PF.
Photo by Saemaeul Geumgo Central Association

Saemaeul Geumgo Central Association and Korea Asset Management Corporation (KAMCO) announced on the 24th that they have signed a memorandum of understanding (MOU) to establish a PF Normalization Fund worth 500 billion KRW to normalize distressed PF projects.

The PF Normalization Fund being established this time was jointly funded with a total of 500 billion KRW by Saemaeul Geumgo Central Association and KAMCO, following the Ministry of the Interior and Safety’s stringent policy on Saemaeul Geumgo soundness management. The fund plans to support the normalization of distressed PF projects through methods such as acquiring non-performing loans (NPLs) from PF and distressed bond projects, debt restructuring, and equity investment.

KAMCO, which is managing the fund, is the leading company in the domestic NPL and corporate restructuring investment market. It also operated the PF Normalization Bank (with a commitment amount of 1.4 trillion KRW) during the PF distress crisis amid the global financial crisis.

This PF Normalization Fund plans to invest in various types of distressed PF projects regardless of residential or non-residential classification. It will utilize KAMCO’s existing investment strategies, such as restructuring existing bonds and providing new funds to normalize projects. Additionally, it is known that the fund can maximize returns through leverage effects by utilizing syndicated loans from the market.

A representative from Saemaeul Geumgo Central Association stated, "Unlike the recently controversial 'parking funds,' which simply transfer financial institution bonds, we decided to invest in this fund considering KAMCO’s past performance and the expectation that various investment strategies can effectively minimize losses for the lending consortium and normalize PF projects." The representative added, "We will continue to demonstrate a strong commitment to normalizing distressed PF projects at Saemaeul Geumgo and will devote all efforts to soundness management, including the normalization of distressed PF projects."