The Korean Teachers' Credit Union (The-K), managing 75 trillion won in assets, has begun selecting a management company to acquire five golf courses nationwide. The fund investment amount is 500 billion won, which will be fully funded by the Korean Teachers' Credit Union. The creation of a blind fund solely for the purpose of investing in golf courses is noteworthy as it is a rare occurrence.
On the 9th, according to the investment banking (IB) industry, the Korean Teachers' Credit Union announced on the 7th that it plans to select one management company to manage the fund intended for the acquisition of golf courses. It will select the management company through a competitive bidding process, with eligibility requiring an asset under management (AUM) of over 500 billion won as of the end of last year. The company must also have experience in the acquisition or sale of domestic golf courses. The fund management period is 30 years from the date of establishment, with an investment period of 5 years from the date of establishment.
The management company selected for the golf course investment project must acquire five golf courses located in various regions across the country, including the metropolitan area, Gangwon Province, Chungcheong Province, Yeongnam Province, and Honam Province. The purpose of this acquisition is to enhance the welfare of approximately 900,000 members nationwide.
The Korean Teachers' Credit Union is expected to manage a total of 1 trillion won, combining the full investment of 500 billion won and a loan of 500 billion won with a collateral recognition rate (LTV) of 50%. Considering that it will acquire five 18-hole golf courses, this means an average investment of about 200 billion won per course. Typically, local golf courses are traded for a minimum of 3 to 4 billion won per hole, while prices in the metropolitan area are around 10 billion won.
The Korean Teachers' Credit Union plans to accept proposals by August 4 and select the preferred negotiation target by the end of August after quantitative and qualitative evaluations. The selected management company is expected to manage not only the fund but also the golf courses acquired in the future. Among the evaluation criteria released by the Korean Teachers' Credit Union, the investment strategy section, which received the highest score of 25 out of 100, includes strategies for operating golf courses and ways to increase revenue and enhance value. The evaluation will be conducted based on quantitative assessments (40%) of the proposals and qualitative assessments (60%) through presentations.
The Korean Teachers' Credit Union recorded a pre-tax net profit of 1.0518 trillion won and a post-tax profit of 721.6 billion won last year. The fund management yield reached 11.1%. The revenue rates by asset class were 10.8% for financial investment, 14.2% for corporations, and 9.3% for alternative investments. It currently owns Sophia Green Country Club in Yeoju.