South Korea pension body NPS appoints 4 PE firms to manage $607m in funds

A bridge in Seoul

South Korea’s National Pension Service (NPS), which oversees $430 billion in assets, has named four private equity (PE) firms to manage 700 billion won ($607 million) of its funds.

In an announcement on June 30, 2016,  NPS disclosed that VIG Partners, Skylake Investment, Lindeman Asia Investment and SG Private Equity would run the its private equity fund (PEF) with a corpus of 700 billion won ($607 million).

VG Partners and Skylake Investment will manage investment in large-cap companies with 250 billion won of entrusted funds for each, while Lindeman Asia and SG Private Equity will be allocated 100 billion won each to invest in mid-sized companies.

Additionally, NPS will soon choose eight PE firms to operate venture funds which will invest in small, early-stage emerging firms.

This development comes in the wake of the NPS being requested to increase its exposure to South Korea’s KOSDAQ market, given that traditionally its stock investment guidelines are tilted towards blue chips listed on the main KOSPI bourse.

Kang Myun-wook, the new chief investment officer of the NPS, recently made a vow to increase the funds exposure to the stocks of listed small and medium enterprises (SMEs) upon taking office.

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The moves come as pension funds in wealthy states grapple with problems such as underfunding, even as ageing demographies and improved healthcare have led to many retirees needing to stretch their income further. This is coupled with many countries increasing their retirement ages.

With many pension funds facing fundamental challenges to their established model, as well as grappling with investment and regulatory changes arising from the 2007/2008 global financial crisis, this move by the NPS is meant to diversity its exposure.

Earlier this year, DEALSTREETASIA reported that South Korea’s Public Officials Benefit Association (POBA), a pension fund for government officials, allotted  $200 million to PE vehicles this fiscal, a 100 per cent jump, from its allocation in 2015.

In 2015, the same fund committed $30 million to a fund run by the Blackstone Group, in addition to allotting $40 million to Oaktree Capital Management; and another $30 million to Lexington Partners. This was the first instance of POBA investing in global PE firms since the 2007/2008 global financial crisis.

Also Read: Japan: ‘Big four’ pension fund Chikyoren chooses Nomura as domestic investment manager

Korean pension fund POBA to double exposure in global PE vehicles, to invest $200m

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.