The National Pension Service (NPS) is to launch a $2.3 billion property fund with Germany’s Allianz SE to invest in core real estate in Asia, with the pension scheme expected to deploy at least 30 trillion won ($25 billion) in new alternative investments by year’s end.

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The 50:50 co-investment fund will target landmark office buildings and logistics and residential facilities in big cities in Asia such as Australia, Singapore, Japan and China, NPS said on June 29.

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They have recently signed an agreement to form a strategic alliance.

“By establishing partnerships with like-minded global leading groups, NPS will share various investment experiences and strengthen capabilities, as well as securing prime investment opportunities to increase long-term returns,” NPS chief investment officer Hyo-joon Ahn was quoted as saying in a statement. NPS will diversify global portfolios by boosting investment in developed Asian countries and emerging markets with high growth opportunities, while continuing to invest in stable developed markets such as North America and Europe, Ahn added.

Korean pension and retirement funds have been pushing for co-investments with global asset managers. Co-investing with general partners is likely to give asset owners more control over the invested asset and generate higher yields, as well as saving fees.

Allianz is the world’s largest property investment firm with a 73.6 billion euro portfolio, or one fifth of its assets under management of 740 billion euros. It has business operations in about 70 countries.

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Further, the $620 billion pension plan is chasing a broader range of assets in search of yields.

“In the fixed income segment, NPS is expanding the scope of treasuries it invests in and diversifying into structured debts and corporate bonds including mortgage-backed securities,” CIO Ahn told a conference last week.

It is also raising exposure to new technology and new businesses such as so-called un-tact businesses.

At the conference hosted by Hana Bank and the Institute for Global Economics, Ahn called on pension funds to take an active approach to snap up decent-yielding investments in the current investment environment.

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