CapitaLand Investment Limited (CLI), a leading global real asset manager, has successfully closed its inaugural South Korea private credit fund, with an equity commitment of KRW 180 billion (approximately S$169.2 million). This brings CLI’s total funds under management in South Korea to S$3.1 billion. The newly established CapitaLand Korea Investment No. 1 Private Equity Fund (PEF) will focus on investments in construction, asset-backed, and mortgage loans across a variety of asset classes, including data centers, lodging, office spaces, and residential properties in South Korea’s key cities.
The launch of the fund follows CLI’s strategic partnership with Korea Investment & Securities (KIS), a subsidiary of Korea Investment Holdings, to jointly manage the PEF. CLI holds an 11% sponsor stake in the fund, aligning with its asset-light strategy aimed at growing its funds under management while maintaining strong alignment with investors.
One of the key investments of the PEF includes a KRW 40 billion loan to develop a data center in Guro, Seoul. This area is known as a prominent data center hub, with high demand due to its proximity to the Yeouido Business District, home to several leading cloud, IT, and financial companies. The data center, set to be completed by the third quarter of 2028, will be equipped with 30 megawatts of secured power to meet growing demand. The project will be managed by SK Ecoplant, which holds an A- credit rating and will provide a completion guarantee. KT Cloud Corp., a subsidiary of KT Corp., will lease and operate the facility.
Matthew Sohn, CLI’s Chief Executive Officer for Korea, commented on the successful closure of the fund, saying, “The strong institutional participation in PEF is a testament to the network and trust CLI has built over more than 20 years of operating in South Korea. With our deep understanding of the South Korean real estate investment landscape, we are expanding our fund products and identifying suitable investment opportunities to meet investors’ demand.”
CLI’s entry into South Korea’s private credit market is part of its broader investment strategy, which focuses on themes of ‘Disruption.’ As traditional lenders in South Korea, including banks, scale back their exposure to real estate loans, CLI views the widening funding gap as an opportunity for private lenders to step in. Sohn emphasized the potential for CLI to scale its private credit portfolio in South Korea, with the goal of delivering long-term value for its capital partners.
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