Korean Pension Service Acquires 51% Interest in Paris Shopping Center

Mall owner Hammerson has sold more than half of its interest in the O'ParinorShopping Centre near Paris to Korea's National Pension Service, freeing $278 million for planned investment.

(August 19, 2010) — The National Pension Service (NPS) of Korea, the fifth-largest pension fund in the world that manages nearly 300 trillion won in assets, has acquired a 51% stake, worth $278 million, in the O’Parinor Shopping Centre in Paris.

The deal is in line with NPS’ plans to boost investments in real estate, infrastructure and private equity funds to 6.4% this year, from 4.5% at November 30, 2009.

The stake was acquired from property company Hammerson, which said it planned to use the proceeds from the sale to invest in the UK and France. Under the deal, NPS will be able to purchase an additional 24% interest in Autumn 2011 from Hammerson for an estimated $136 million. Some of the funds would also be reinvested into assets such as Silverburn, in Glasgow, and future developments such as Les Terrasses du Port, in Marseille, Reuters reported.

“This transaction is in line with our strategy of investing in high quality global real estate,” Hee Seok Kim, head of global investment at NPS, said in a release. “Working alongside Rockspring, we are very pleased to be creating a new joint venture partnership with Hammerson, one of Europe’s foremost managers of retail property.” Our strategy is to improve the growth prospects of the portfolio by releasing capital from mature assets where we have created value, such as O’Parinor, reinvesting into assets such as Silverburn in Glasgow and future developments such as Les Terrasses du Port in Marseille,” added David Atkins, chief executive of Hammerson.

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As of June 30, 2010, the O’Parinor Shopping Centre, held in co-ownership with Carrefour and Redevco and acquired by Hammerson in 2002, was valued at $554 million. Net income from the property in 2009 was $28 million.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

(August 19, 2010) — China’s $332.4 billion sovereign wealth fund may select China Asset Management Co., the country’s biggest fund manager, to oversee its international investments, Bloomberg reported.

A person with direct knowledge of the matter told Bloomberg that China Investment Corp., which is responsible for managing part of the nations foreign-exchange reserves, would invest through China Asset’s Hong Kong unit. As of December 31, China Asset oversaw more than $44 billion.

According to the source, who requested anonymity as no announcement has been made, the selection would be the first time the CIC picked a Chinese firm to manage money on its behalf.

“CIC is in the process of expansion with its overseas investments in various parts of the world, and it makes sense for it to pick a local money manager to invest in certain types of overseas assets,” Peter Alexander, Principal at Z-Ben Advisors Ltd., told Bloomberg.

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Late last month, the CIC reported at 11.7% return on oversees investments last year, driven partly by heightened bets on commodities to benefit from a rebound in global markets. According to the CIC, 36% of its overseas portfolio was invested in equities last year, 26% in fixed-income products, 32% was held in cash and 6% was in alternative investments, highlighting the SWF’s move toward higher-risk assets last year. In terms of geographic region, North America was the top destination for CIC’s diversified equity investments last year, accounting for 43.9%. Asia and the Pacific regions attracted 28.4%, Europe had 20.5%, Latin America had 6.3%, and Africa had 0.9%.

Globally, sovereign wealth fund assets climbed 9% in 2009 from a year earlier to $3.5 trillion, London-based research firm Preqin Ltd. said in March.

To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742