The Korean national pension system has partnered up with the firm KKR to purchase a minority stake in a new Chevron pipeline. The deal is said to be worth close to $1 billion.
The Colonial Pipeline runs to the US eastern seaboard from the Gulf of Mexico. After a very tight auction, with competition bidders that included sovereign wealth funds, the Korean partners finally bought the 23.4 percent stake in the pipeline project. The deal is an example of the recent trend for large investors to embrace the idea of investing in infrastructure and in particular the energy sector.
The National Pension Service of Korea has an estimated $280 billion under management, making it one of the biggest, as well as one of the fastest growing pension fund world-wide. KKR, a private equity firm has structured the deal as an account which they manage on behalf of the NPS, rather than a passive investment by the NPS.
Korea, like many other countries in Asia has watched its currency appreciate against the US dollar, leading to concerns over the rapid rise. The move to increase investments overseas is a way to stem the rise of their currency.
NPS is new to the energy sector, but has large stakes in high-profile public companies in Korea, but has a large portfolio outside the country as well. Their most recent activity includes purchasing high-end real estate and commercial properties, such as the recent acquisition of the HSBC headquarters in London’s popular district, Canary Wharf.
