The Military Mutual Aid Association, the fifth-largest institutional investor in South Korea, is considering a new business opportunity in the private military company sector, a high-ranking official of the fund said Wednesday.

The MMAA forecast expanded business opportunities in the private military company segment as the local military is moving to outsource more of its non-combat services down the road, Lee Deok-keon, the association's managing director for planning and coordination said in a press conference.

In January, the Ministry of National Defense announced it will open up its back office business to the private sector and downsize its personnel by 2,500 before 2019.

"The MMAA will proactively push to make inroads into the private military company industry," Lee said, referring to the security services sector provided by non-governmental entities. 

To that end, the mutual military fund will capitalize on its existing affiliates in the military intranet, facility maintenance and defense goods sectors to expand their business presence, Lee said.

The MMAA will also consider establishing a new company or seek a merger and acquisition deal, he said. (Yonhap)