Korea's NPS CIO talks with GPIF, GIC execs on asset allocation

South Korea’s National Pension Service (NPS) Chief Investment Officer Seo Won-joo has visited Japan and Singapore on his first overseas business trip this year to exchange know-how on buoying domestic stocks and asset allocation.

The CIO had meetings with executives of Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, and sovereign wealth fund Government of Singapore Investment Corporation (GIC) and some alternative investment firms in the Southeast Asian city-state from June 9 to 13, NPS said on Monday.

Seo visited the state-run institutions with NPS infrastructure investment head Hwang Mi-ok, shareholder activism team leader Lee Seung-geun and other NPS employees, according to market insiders.

Seo discussed strategies on boosting local stocks with GPIF and shared views on long-term portfolio management with GIC, said market insiders.

NPS, the world’s third-largest pension fund managing 1101.3 trillion won ($793.5 billion) in assets as of the end of the first quarter, pledged in March it will actively support the government’s policy to buoy the anemic domestic stock market by buying up to 11 trillion won worth of local stocks. 

GPIF, managing around 220 trillion yen ($1.38 trillion), nearly doubled its exposure to Japanese stocks to 24.7% of its entire assets as of end-December last year from 2010. The state-run pension fund made such efforts through the government’s policy to boost undervalued local stocks, which is similar to the Korean authorities' plan.

In Singapore, Seo talked with GIC executives about the two state-owned funds’ partnerships and NPS’ introduction of a 20-year asset allocation scheme for long-term profitability. 

GIC has used the long-term asset allocation system, or standard portfolio, which allows a proportion of risk assets or stocks to 65% of the entire fund while limiting safe assets or bonds to 35%. NPS is set to introduce the system to properly respond to market changes.

Seo also talked with Singapore offices of global asset managers such as TPG Inc. and Adams Street Partners, and visited the Frasers Tower Singapore skyscraper, one of NPS’ key assets constructed by Korea’s Hyundai Engineering & Construction Co. The Korean pension fund acquired 50% of the property for 360 billion won in 2019.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com


Jihyun Kim edited this article.