The National Pension Service (NPS) will strengthen the investment functions of its overseas offices, a high-ranking NPS official said on July 8.
This means the NPS will raise the proportion of overseas investment in its total investment assets. “The NPS is planning to transfer more investment functions to its three offices in New York, London and Singapore. The NPS established a PEF investment unit at the end of last year as part of its strategy to turn its regional portfolio into global portfolio,” said Choi Hyung-don, head of the NPS private equity fund investment unit.
“The NPS tends to prefer investment in South Korean assets, but it will reduce investment in domestic assets and increase investment in overseas assets,” Choi said.
In addition, he emphasized that the NPS would expand alternative investments instead of investment in stocks. “We have gained approval for many of our alternative investment expansion plans from the NPS Investment Management Committee. The main purpose is to expand alternative investment without increasing risks,” Choi said.
The NPS’ fund operation yields recorded -0.92 percent last year, which was attributable mainly to the -16.9 percent return on investment in domestic stocks. On the other hand, the NPS posted 11.8 percent of earnings in alternative investment, making up for the loss from domestic stock investment.
When asked how much he would increase the proportion of private equity funds, Choi said pruduently, “Currently, the operating assets of the NPS’ private equity fund investment unit come to 23 trillion won (US$19.44 billion) and the figure exceeds 40 trillion won (US$33.81 billion) when the investments pledged to private equity funds are included. We cannot release details, but we are planning to increase it further.”