ADIA Funds SC Lowy’s S. Korea Private Credit Strategy

The Hong Kong-headquartered SC Lowy, a leading alternative asset manager with $1.6 billion in assets under management, has secured a “substantial commitment” from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) for its South Korea Private Credit Strategy focusing on the real estate sector.

The fund will provide tailored real estate credit solutions to developers, construction companies, and domestic financial institutions in South Korea. It will primarily target senior secured lending for residential, commercial, and logistic developments in major cities.

The fund aims to bridge the financing gaps in the South Korean real estate market, where traditional lenders have pulled away.

The latest funding is the series of such investments ADIA has made into alternative funds since June this year. The Abu Dhabi’s sovereign wealth fund has deployed an undisclosed sum in the London-based credit investor Polus Capital Management.

ADIA also invested $199.8 million investment in Australian real estate private credit company Qualitas Diversified Credit Investments, and an unspecified investment in Jain Global. During the same month, an ADIA subsidiary backed European Pemberton Asset Management’s new Nav strategic financing strategy.

SooCheon Lee, Chief Investment Officer at SC Lowy, said that their South Korea Private Credit Strategy brings innovative financing solutions to the South Korean real estate market. This fund presents an opportunity to address the growing demand for private credit in South Korea’s real estate sector, he said.

Mohamed Al Qubaisi, Executive Director of the Real Estate Department at ADIA, said that real estate private credit has been growing rapidly in South Korea and SC Lowy is one of the country’s leading providers of innovative financing solutions.

This commitment aligns with our strategy of supporting differentiated private real estate credit platforms alongside partners with established track records and strong market access, Al Qubaisi added.

Leveraging SC Lowy’s extensive experience in real estate investment and credit analysis, the fund will employ a rigorous underwriting process to identify and capitalize on high-quality opportunities. By focusing on private credit, the fund aims to bridge the financing gaps left by traditional lenders, particularly in underserved segments of the market.

Innovative Financial Solutions

With a proven track record in both private credit closed-end and open-ended funds, SC Lowy is committed to delivering innovative financial solutions that maximise value for its investors. Our approach combines rigorous credit analysis with a focus on mitigating risk, ensuring robust returns while safeguarding capital.

According to data from Preqin, the trusted source of essential data and insights for every alternative professional, there is currently little capacity for real estate private credit in South Korea or APAC, despite rapid growth in private debt in the region.

The Assets under management (AUM) at APAC-focused real estate credit managers stood at just $6.3 billion at the end of 2023, the data showed. The proportion of dry powder to AUM has dropped steadily from 52% in 2019 to just 14% in December 2023, indicating that fundraising has fallen dramatically short of deployment.

SC Lowy’s Strategic Investments Fund IV is an Asia Pacific-focused direct lending fund providing financing to South Korean-based developers, construction companies, and domestic financial institutions, focusing on residential, commercial, and logistics projects in major cities. It closed $130 million at the start of 2024, and has a $500 million target.