Macquarie Samchully Asset Management Co. Ltd., overseeing South Korea’s $447 million energy and minerals fund, may buy stakes in companies and projects in Canada, the U.S. and Australia.
“We’ve looked at around 30 opportunities so far and we have six in current process,” John Spence, chief executive officer, said in an interview in the company’s Seoul office today. The fund is looking to spend about $100 million in each project and is interested in assets that will provide minimum annual returns of between 12 and 15 percent, he said.
South Korea is encouraging state-run companies to secure overseas minerals and oil, pitting them against rivals including PetroChina Co. and Oil & Natural Gas Corp. to take advantage of a decline in commodity prices. Crude oil in New York dropped to a five-month low yesterday and prices of copper, aluminum and zinc fell on concern that Europe’s debt crisis will derail a global recovery and cut consumption.
“Certainly, now it is good time to make investment in oil,” said Spence. An escalation of Europe’s debt woes won’t delay the fund’s investment decision, he said. “Crises are always good opportunities.”
Macquarie expects oil prices to rise to $100 a barrel by 2013, Spence said, declining to give details of the fund’s planned investments.
Macqurie Samchully, a joint venture between Macquarie Group Ltd. and Samchully Co., South Korea’s largest city gas distributor, was picked by the government in December to manage the $447 million fund. Investors in the fund include state-run Korea National Oil Corp., Korea Resources Corp. SK Energy Co., the nation’s biggest oil refiner, and state-run Korea Development Bank are co-managers of the fund.
The fund will have a 5-year period to invest. Samchully Chief Executive Chung Soon Won said in February the venture, which was registered January, will start investing in the first half of this year.
Oil and gas assets will have a 70 percent share of the fund’s investments with coal and other minerals making up the rest, Spence said. Assets in production will account for 70 percent of the fund and projects that are being developed will make up the remaining 30 percent, he said.
“Typically, we’re looking for transactions around the $100 million mark so the fund itself will have diversification and different exposures to oil, gas, coal and another minerals in the portfolio,” he said.
Crude oil for June delivery traded at $70.691 a barrel as of 2:27 p.m. in Singapore. The Reuters/Jefferies CRB Index of 19 commodities is at a seven-month low amid speculation that efforts in Europe to curb government debt will slow economic growth and China may step up measures to reduce asset bubbles.