By Heejin Kim
SEOUL, May 21 (Reuters) - Korea Post is seeking to invest funds it manages in AI data centres and multi-family houses in Europe and North America, as its postal service is squeezed by mounting losses from the mail business, its president told Reuters.
The state-run group, which manages 157 trillion won ($104.28 billion) in savings and insurance funds, sees opportunities in developed market real estate after a slump during the COVID-19 pandemic, In-hwan Park, president of Korea Post, said
in an interview on Thursday.
Korea Post is still cautious on office buildings, but is looking at so-called secondary funds investing in data centres, logistics facilities and multi-family houses in North America and Europe.
"We think the valuations of properties in developed countries like the United States have been corrected a lot," Park said. "So under these circumstances, we think secondaries look good."
Such investments have a "margin of safety" and allow entry with discounts in stakes in underlying assets, he said.
It has selected Blackstone and Madison International Realty as preferred bidders to run its $230 million fund focused on overseas property secondaries.
The strategy reflects a broader global trend with assets under management linked to real estate secondaries estimated at $45.1 billion as of September 2025, up from $16.1 billion in 2016, according to investment data provider Preqin.
In November 2025, Singapore-based Aquilius Investment Partners said it had raised $1.1 billion for its second Asia Pacific real estate secondaries fund, the largest in the region of its kind.
POSTAL BUSINESS LOSSES
Despite the push into higher-yielding assets, Park said Korea Post still maintained a conservative and stable portfolio.
The 142-year-old postal service, which holds savings and insurance bought by retail investors, has a legal obligation to guarantee principal and interest.
Park said it still aimed to maintain its strategy of allocating around 70% of its funds to safe-haven assets, like bonds, citing rising market uncertainty due to the Iran war.
Demographic pressure in South Korea - where 20% of citizens are 65 or older - is also reinforcing the need to pursue low-risk assets with stable returns for retirees, he said.
For the remaining 30% of funds, however, Korea Post is seeking higher returns by investing more in mid-risk and mid-return products such as private debt and mezzanine finance, he said.
The fund currently hedges exposure to overseas bonds and alternative assets, but not overseas equities. Park said it has conducted internal research on whether to adjust the strategy on hedging as costs have risen due to higher U.S. rates compared with Korean rates, though no decision has been made.
"But we are a conservative investor ... so even if we do, we cannot take a more aggressive unhedged position than the market," said Park.
The shift to yield-hunting comes as Korea Post, like peers in other countries, faces challenges in its traditional mail and parcel deliveries.
The mailing and parcel service made a 311.6 billion won loss in 2025, which is forecast to rise to a 340 billion won loss for 2026.
Korea Post's earnings from managing savings and insurance funds can legally offset losses from postal services, he said, pointing to a strong Korean equity market performance with the KOSPI benchmark rising more than 80% so far this year.
"I'm cautiously predicting we might not have to worry too much about the postal business's losses this year," he said.
($1 = 1,505.6000 won)
(Reporting by Heejin Kim; Additional reporting by Cynthia Kim, Yena Park and Tom Westbrook;Editing by Ed Davies and Stephen Coates)
