The National Pension Service (NPS) has decided to sell Centerfield, located in Seoul's Gangnam district, rather than replace its general partner (GP) managing the asset. Koramco Asset Management had initially been selected as Centerfield's GP, but this will be withdrawn, and the NPS is expected to proceed with steps such as selecting a sale advisor.
According to the investment banking (IB) industry Monday, the NPS held its Alternative Investment Committee meeting Friday and ultimately rejected the proposal to change Centerfield's GP. After extending the fund's maturity, the NPS had sought to replace the GP from IGIS Asset Management with Koramco Asset Management, but concluded that a sale would be the better option.
Centerfield is an ultra-large prime office building located in Seoul's Gangnam area, in which the NPS invested in 2018 with IGIS Asset Management as GP. The total investment scale is about 2.1 trillion won, and its current market value is estimated to exceed 4 trillion won.
Ahead of the fund's maturity last October, the NPS had been pursuing a plan to replace Centerfield's GP from the existing IGIS with Koramco Asset Management. At the recently held Alternative Investment Committee meeting, concerns were raised that the structure of paying a success fee and equity profit to the existing GP IGIS without an actual sale of the asset was not legally appropriate. The industry had estimated that about 75 billion won in fees would be paid by the NPS to IGIS Asset Management. Following discussions, the committee is said to have withdrawn the GP replacement proposal.
With this decision, the pension fund is expected to extend the existing Centerfield fund and proceed with asset sale procedures. Currently, Centerfield is owned by the pension fund and Shinsegae Property, each holding a 49.7% stake, with IGIS holding 0.5%.
