Third investment from Camco PF normalization fund, following Deokso and Sinchon District 3-3

Total financial restructuring of 251 billion won; 76 billion won in subordinated loans deployed

Fund acquires 71.7 billion won in existing loan claims and extends 4.3 billion won in new credit

[Provided by KB Asset Management]
[Provided by KB Asset Management]

KB Asset Management's Camco project financing normalization support fund is deploying 76 billion won ($56.6 million) in subordinated financing to support the restructuring of a residential development project in Seoul's Sinchon area. The investment — the fund's third, following earlier commitments in Namyangju's Deokso and Sinchon District 3-3 — brings the fund's cumulative investment to 165 billion won.

According to investment banking industry sources Friday, KB Asset Management is executing a 76 billion won subordinated loan for the redevelopment of zones 4-1 and 4-12 within Sinchon's Improvement Zone 4. The investment vehicle is KB Wise Style Private Real Estate Investment Trust No. 21-3.

The project involves developing a residential complex on a site near Sogang University Station on the Gyeongui-Jungang Line in Nogo-san-dong, Mapo-gu, Seoul. According to the Seoul Metropolitan Government, the primary land use designation for Mapo zones 4-1, 4-10 and 4-12 is residential, with plans to supply 688 housing units — including 133 public rental units — and 60 officetel rooms.

The project's ownership has been transferred from Geonsa Retail & Estate, an affiliate of Buildings and People, to Mapo KR Holdings, which also carried out the financial restructuring. The total loan agreement between borrower Mapo KR Holdings and the lender group stands at 251 billion won, structured as 175 billion won in senior Tranche A debt and 76 billion won in subordinated Tranche B debt. The proceeds will be used to cover land costs and repay existing loans.

The KB Asset Management fund will take on the entire subordinated loan. Specifically, it will acquire 71.7 billion won in existing loan claims against the previous borrower and extend 4.3 billion won in new credit to Mapo KR Holdings, which will assume the previous borrower's debt obligations through a novation arrangement. The subordinated loan matures 12 months from the date of execution.

KB Asset Management's PF normalization fund launched in September 2023. Its first investment was a 40 billion won commitment to a residential development project in Deokso, Namyangju, followed by a 49 billion won investment in the Sinchon District 3-3 housing project. Combined with the latest 76 billion won deployment, the fund's cumulative investment now stands at 165 billion won.

The Camco PF normalization fund has been in operation since September 2023, with the aim of restructuring and stabilizing project financing sites that are distressed or at risk of becoming so. Five asset managers were appointed at launch: Koramco Asset Management with 245 billion won, Capstone Asset Management with 225 billion won, IGIS Asset Management with 200 billion won, Shinhan Asset Management with 235 billion won, and KB Asset Management with 200 billion won — bringing the total fund size to 1.1 trillion won.

KB Asset Management has also been accelerating new product launches. On Tuesday, it released the KB Korea Advanced Strategic Industries 50 Target-Conversion Fund No. 2, which invests in shares of domestic advanced strategic industry companies and high-grade bonds. The fund maintains an equity allocation of less than 50 percent, selecting 20 to 30 stocks from sectors including semiconductors, defense, biotech, secondary batteries, space and robotics.


th5@heraldcorp.com