(February 10, 2013) – South Korea’s National Pension Service (NPS) has opened investment positions to foreign applicants for the first time, CEO Choi Kwang told Bloomberg in an interview.
The organization plans to double its in-house investment team and expand holdings of international assets, according to Choi.
“NPS is a big whale in a small pond,” he said. “We have to go out and find promising countries… At the moment, to be really frank, we do not have enough staff to do that job.”
In addition to its Seoul headquarters, NPS operates satellite investment offices in New York and London. The former has a staff of five, which Choi said could increase to as many 40. In London, NPS is looking to add up to 26 people to the current four-member team.
International assets represented 18.2% of the $395 billion portfolio at June 2013, according to NPS’ annual report. In 2012, its foreign equities and a fixed-income holdings both outperformed their domestic counterparts.
Choi said he intends to boost the fund’s allocation to overseas assets to 30% over the next five years.
“NPS is working to overcome the limitations of the Korean market,” the annual report stated. “NPS is gradually expanding overseas investments in consideration with its role concerning incumbent effects on foreign exchange markets. It is also sharpening its in-house fund management capabilities through strategic alliances with other pension funds and global asset management companies.”
These strategic relationships have been forged with high-profile asset owners: Dutch pension system APG, the Canada Pension Plan Investment Board, and China’s national social security fund.
For asset management partners, NPS has again looked beyond its shores. It has forged strategic relationships with Morgan Stanley (fixed income), AXA (infrastructure), and Investec (equities), among others.
NPS is the primary social security system in South Korea, covering more than 23 million people as of last June.
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