Korean SME Federation to Deploy $350M in Blind Real Estate Fund

This article was first published on Signal, Seoul Economic Daily's capital markets newsletter, at 13:39 on March 9, 2026.

The Korea Federation of Small and Medium Business (KFSMB), which operates the Noranusanm Mutual Aid program, will commit 500 billion won ($350 million) to a domestic real estate fund manager—the largest such allocation in its history.

Major domestic real estate asset managers including Igis Asset Management, Mastern Investment Management, and Koramco Asset Management have all submitted bids, according to investment banking sources on Sunday.

The federation accepted proposals through the end of last month and plans to select one firm this month. The mandate requires a 6% return target with a 10-year fund term.

Nearly all major domestic asset managers submitted proposals to secure the mandate, sources said. Mirae Asset Global Investments and Pacific Asset Management also applied alongside the three leading bidders.

"Given the unprecedented size of this commitment, every asset manager is watching this selection process closely," an investment banking industry source said.

The selection outcome could determine this year's business performance for real estate managers, as several large office buildings have come to market simultaneously. In the commercial real estate sector, acquisitions frequently fall through when preferred bidders fail to secure equity capital. Firms with blind fund commitments can more readily resolve equity funding challenges.

The K Twin Tower in Gwanghwamun, central Seoul, stands as a prominent example of current market offerings. The property, held by Samsung SRA Asset Management, has a gross floor area of approximately 83,878 square meters. Market participants expect the transaction value to exceed 1 trillion won.

Pine Avenue Building A, currently serving as Shinhan Card's headquarters, is also undergoing a sale process. Shinhan Card reportedly seeks more than 800 billion won for the property.

Beyond the KFSMB allocation, the National Pension Service also plans two separate real estate fund commitments this year. The pension fund is reportedly considering 300 billion won commitments to each selected manager, targeting two to three mandate winners.

"Sellers also consider blind fund holdings an important factor, so asset managers that win these large mandate competitions this year will likely capture many deals," another investment banking source said.