Korea’s largest institutional investor National Pension Service said it will increase the proportion of overseas investment in private equities in the Asian region to around 30 percent in its long term strategy.
Out of the 512 trillion won ($429 billion) pension fund, 19.5 trillion won is allocated as global private equity investment, according to Yang Young-sig, the head of global private market at the investment division of the National Pension Service.
National Pension Service (Yonhap)
“NPS aims to improve risk-adjusted return through investment in overseas private equities,” Yang said during the Korea Capital Market Conference 2016 in Seoul.
“By region, we will increase its proportion to 30 percent in Asia and emerging market from the current 12 percent. By strategy, we will increase the proportion of mid-cap buyout to 25 percent,” he said.
Yang added that the overseas offices of NPS such as those in New York, London and Singapore will expand their coverage to near regions to diversify target regions.
His comments came during a panel discussion themed on institutional investors’ strategy for overseas private equities.
Kim Hee-joong, deputy director of the AI Team at Korea Post, said Korea Post has about 110 trillion won in assets and 4 percent of the fund is allocated to alternative investments, mainly in real estate, hedge funds and private equity funds.
KP’s strategy is to divert its investment direction from buyout and growth funds to debt investment such as direct lending.
“We have decided to change our core investment strategy. In this way, the size of the investment will be larger with a decrease in target returns,” Kim said.
Korea Investment Corp., the sovereign wealth fund with $91.8 billion assets, tends to select fund managers that have their own investment principles and execute them in a continuous matter, said Lee Sueng-tak, deputy director of the real estate & infrastructure unit of KIC.
Toru Bando, managing director of Morgan Stanley and head of Asia at Morgan Stanley Real Estate Investing, advised Korean brokerages and asset management companies to make aggressive investments in the global market, to improve global competitiveness.
By Kim Yoon-mi (yoonmi@heraldcorp.com)
