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Asset Allocation

Equities, Fixed Income Fuel 9.1% Return for Korean Pension Fund in 1st Half of 2023

The strong performance raised the National Pension Service’s asset value to approximately $740 billion.

By Michael Katz



The Republic of Korea’s National Pension Service reported a 9.09% investment return for the first half of 2023 to raise its total asset value to 983 trillion won (approximately $740 billion), up from 890.5 trillion won at the end of 2022.

“Despite fears of the global banking crisis and recession at the beginning of this year, NPS performed well with strong gains from equity and fixed income assets, fueled by a slowdown in inflation and the adjustment of interest rate hike pace,” the pension giant said in a release.

The robust returns were a sharp reversal of fortune for the world’s third-largest pension fund, which lost more than 8%, 79.6 trillion won, in 2022 when it “faced unprecedented declines in both equity and fixed income markets.” However, according to the pension fund, over the first six months of 2023, all losses from the previous year were recouped, and an additional investment income of 4.4 trillion won was generated.

Within the NPS investment portfolio, the top performing asset class was global equity, which returned 17.24%, followed by domestic equity, which earned 17.12%. Global fixed income returned 6.21%, while alternative assets and domestic fixed income returned 5.01% and 2.72%, respectively.

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The lion’s share of the first half returns came during the first quarter of the year, when the pension fund returned 6.35%, approximately 58.4 trillion won.

According to the pension fund, despite concerns over a banking crisis in the U.S., domestic and global equity “delivered solid returns, boosted by improved appetite for risky assets as the U.S. debt ceiling issue was resolved and economic indicators showed a positive trend.” The release also stated that despite central banks continuing to raise interest rates, the decline in domestic and global fixed-income yields was limited, thanks to expectations of cooling inflation and a slowdown in the pace of rate tightening.

The NPS also announced that most of the investment income from alternative assets comes from interest and dividend income, as well as foreign exchange gains from a rise in the dollar/won exchange rate. However, the fair values of alternatives are assessed at the end of the financial year and are not reflected in the pension fund’s quarterly performance.

“2022 was a very challenging year for asset management due to unfavorable economic and investment conditions,” NPS Chairman and CEO Kim Tae-hyun said in a release. “We will continue to strive to enhance investment returns by building a well-diversified portfolio and capturing new investment opportunities.”


Related Stories:

Korean National Pension Fund Loses More Than 8% in 2022

South Korean Pension Fund Will Buy US Dollars to Boost Sinking Won

World’s 300 Largest Pension Funds’ Assets Rise to Record $23.6 Trillion

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Home > News > Corporate Moves > Blackstone Creates Corporate Credit, Asset-Based Finance, Insurance Group
Corporate Moves

Blackstone Creates Corporate Credit, Asset-Based Finance, Insurance Group

Blackstone Credit & Insurance could help push the firm to $2 trillion AUM.

By Matt Toledo



Blackstone Inc. plans to form a new business unit out of its corporate credit, asset-based finance and insurance groups. The new group, named Blackstone Credit & Insurance, will seek to streamline the investment process for clients and will act as a one-stop place for alternatives such as private credit, the firm announced on Wednesday.  

Blackstone CEO and Co-Founder Steve Schwarzman has big plans for the new group. “We see the opportunity for BXCI, along with Real Estate Credit, to reach $1 trillion in the next 10 years,” Schwarzman said in a statement from the company. Blackstone in July announced its assets under management topped $1 trillion. 

“Exceptional demand from our clients has made Credit and Insurance the fastest-growing segment at Blackstone,” Jon Gray, Blackstone’s president and chief operating officer, said in the statement. “This integration allows us to be an even more effective lender and more comprehensively serve our insurance, pension fund and private wealth clients.”  

The move by Blackstone, the largest private equity manager by assets, comes at a time when group and individual annuity sales are hitting record levels in the U.S., and growing numbers of corporate pension plan sponsors are engaging in or considering pension risk transfer transactions to offload some or all of their pension liabilities. 

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In June, Fidelity formed Soteria Reinsurance Ltd., a Bermuda-based reinsurance firm focused on pension risk transfer. Earlier in September, Prudential Financial Inc. and Warburg Pincus LLC announced the creation of another Bermuda-based life and annuity reinsurance company, Prismic Life Reinsurance Ltd.  

Prudential announced in August it completed a $1 billion pension risk transfer deal with utility company PSEG, and in May, AT&T Inc. disclosed it was transferring $8.05 billion in pension assets to insurer Athene Holding Ltd. 

The predecessor units of Blackstone’s new group have been the company’s fastest growing. In the last three years, they have collectively doubled their AUM to $295 billion, the firm reported. Blackstone’s insurance assets alone have tripled since 2020.  

The firm also announced several promotions related to the formation of ‘BXCI,’ its shorthand for the group. Gillas Dellaert, global head of insurance solutions, will be promoted to global head of BXCI. Dwight Scott, global head of credit, will be promoted to chairman of BXCI. Jonathan Pollack, global head of structured finance, will become global head of real estate credit.  

“I am excited to take on this new role and believe that there is immense white space to continue expanding our leading credit and insurance platforms,” Dellaert said in the statement. “Bringing together nearly all of the firm’s credit activities further extends the competitive advantage of Blackstone’s scale, private origination capabilities, and intellectual capital—helping us better serve our clients.”  

“The combined BXCI team will deliver the best of Blackstone to our investors and borrowers,” Scott said in the statement. “We believe we are still in the early innings of a megatrend in private credit. Particularly in today’s elevated base rate environment—and given the senior-secured structure of many of our products—we believe it is currently the best risk-adjusted environment for this asset class in decades.” 

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