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Korea Post has planned a shift in its investment strategy, focusing on AI data centres and residential real estate in developed markets such as the U.S. and Europe. The move comes as its traditional postal business continues to face rising losses from mail and parcel operations. The organisation, which manages over USD 104 billion in savings and insurance funds, is also exploring secondary real estate funds and mid-risk investment products to improve returns. While maintaining a largely conservative portfolio, it is gradually increasing exposure to higher-yield global assets amid market uncertainty.
Korea Post is looking to allocate its fund portfolio toward AI data centres, logistics assets, and multi-family housing projects in North America and Europe, as it responds to continued pressure from losses in its postal operations. Advertisement
The state-run institution, which manages around 157 trillion won (about USD 104.28 billion) in savings and insurance funds, has been reassessing opportunities in developed markets, particularly in real estate segments that saw corrections after the COVID-19 period.
Its leadership has indicated that while office assets remain less preferred, interest is growing in secondary real estate funds focused on data centres, logistics infrastructure, and residential housing. The organisation believes valuations in developed economies, especially in the United States, have adjusted significantly, creating entry opportunities with improved downside protection.
As part of this strategy, Korea Post is reviewing secondary fund investments that allow participation in discounted stakes of underlying assets. It has also selected Blackstone and Madison International Realty as preferred bidders to manage a USD 230 million fund focused on overseas property secondaries.
Industry data from Preqin indicates that global assets under management in real estate secondaries have grown sharply over the past decade, reflecting wider institutional interest in this segment. At the same time, firms such as Aquilius Investment Partners have recently expanded capital raising activity in the Asia Pacific secondaries space, highlighting growing regional momentum.
Despite this shift toward higher-return assets, Korea Post continues to follow a conservative allocation model. The institution maintains around 70% of its portfolio in low-risk instruments such as bonds, citing global uncertainty and geopolitical concerns. It also remains bound by its obligation to guarantee principal and interest on savings and insurance products.
The remaining 30% is being gradually deployed into mid-risk strategies including private debt and mezzanine finance to enhance overall returns. The organisation has also been evaluating its hedging approach for overseas investments, especially as rising interest rate differences between the U.S. and South Korea have increased hedging costs. However, no final decision has been made regarding changes in equity hedging exposure.
Postal operations continue to weigh on financial performance, with the mail and parcel division recording a loss of 311.6 billion won in 2025 and projections indicating a further rise to 340 billion won in 2026. Despite this, Korea Post noted that gains from managing its financial portfolio can offset operational losses.
The broader domestic market environment has also supported its investment capacity, with the KOSPI showing strong performance and rising significantly over the past period.
Source Reuters
5th Jun, 2025
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