NPL Funds

NPL funds have been a core investment strategy for IGIS Asset Management’s Special Situations team, strengthening its market presence since 2016. Initially centered on acquiring distressed loan pools from banks, the fund’s strategy has evolved to adapt to shifting market dynamics. This shift allows for a more flexible response to the evolving environment in the distressed debt market while seeking investment opportunities with risk considerations.

NPL Fund I (2016): Launched with approximately KRW 340 billion, this Fund adopted a large-scale investment strategy, acquiring entire NPL pools from banks. Fund I was pivotal in building investor confidence in a market environment where stable returns were prioritized.

NPL Fund II (2019): Building on the success of Fund I, Fund II was launched with KRW 255 billion and surpassed its target return of 8%, achieving an internal rate of return (IRR) of 13%, which led to its early liquidation.

NPL Fund III (2021): Appointed as an NPL investment manager by KAMCO, Fund III received KRW 60 billion in seed capital, growing to a total fund size of KRW 124 billion. Unlike its predecessors, Fund III reduced its allocation to NPL pools and shifted its focus toward single NPLs, anticipating opportunities arising from asset sales, corporate restructuring, and credit market constraints.

NPL Fund IV (2024): Established with KRW 124.2 billion, Fund IV builds upon Fund III’s strategy while incorporating an alpha strategy for special situations investing. By expanding into structured corporate finance solutions such as collateralized BW investments and distressed asset restructuring, the fund aims to maximize asset management efficiency.

PF Restructuring Funds

Korea Asset Management Corporation (KAMCO) selected five asset management firms, including IGIS Asset Management, as entrusted operators for the PF project normalization support fund. In September 2023, KAMCO established the fund with a total KRW 1.1 trillion. IGIS Asset Management raised additional private capital on top of KAMCO’s KRW 100 billion investment to set up the fund.

The PF Restructuring Fund aims to acquire distressed PF loan assets, restructure project financing, and restore financial viability to stalled developments. The investment strategy is structured as follows:

Distressed Bridge Loan Restructuring: Liquidity is provided through debt acquisition or refinancing for bridge projects that are either distressed or at risk, as well as for pre-construction PF projects. These PF loans are then acquired and consolidated, with legal issues resolved and financial and operational structures restructured to restore project viability.

Bridge Loan & PF Capital Lending: Capital is provided to ensure project continuity and address liquidity shortages. The deployed funds are primarily used for permit acquisition, initial construction costs, or the repayment of existing debt. Collateral arrangements or interest rate adjustments are structured where necessary to maximize capital recovery.

SS&D (Special Situations & Distressed) Investments: This strategy seeks to capitalize on market inefficiencies arising from special situations to generate attractive risk-adjusted returns. Ownership of distressed projects is secured through foreclosure or auction processes, followed by additional development or restructuring initiatives to restore value and optimize returns.

Distressed Asset Investments

Beyond traditional loan investments, IGIS has expanded its scope to include direct equity investments in distressed assets, adopting a comprehensive and proactive investment approach. This strategy is designed to leverage market dislocations and maximize value creation across asset classes.

IGIS actively manages specialized funds targeting distressed office assets, urban logistics centers acquired through public auctions, and value-added investments via negotiated asset acquisitions. The firm's asset-specific approach ensures targeted and efficient investment execution, optimizing short-term performance while maintaining long-term growth potential. Building on this foundation, the firm plans to integrate its diverse distressed asset investments under a unified 'One Fund' structure. This strategic platform will enhance operational flexibility, foster cross-asset value creation, and systematically diversify risk, establishing a more sustainable and scalable investment framework.

By Soyeong Park, Contents Writer

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