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Alternative Market Briefing

Korea’s National Pension Service is looking to invest $869m in offshore hedge funds

Monday, July 20, 2015

Komfie Manalo, Opalesque Asia:

South Korea’s National Pension Service (NPS) said on Sunday it plans to invest 1 trillion won ($869 million) in overseas hedge funds in a bid to diversify its portfolio amidst the backdrop of declining rates and a waning economy.

An NPS spokesman was quoted by the Korea Times as saying, "Instead of directly investing in a hedge fund, we will . . . make an investment in global hedge funds. Depending on asset operation results, we may consider increasing our investment in hedge funds."

The report said the NPS is trying to veer away from traditional bonds and equities and have shifted their attention at alternative investments for opportunities, particularly in local companies, property and infrastructure.

The plan, which was posted at the state-run Ministry of Health and Welfare web site, said the $869 million is just an initial foray into alternative investments from the NPS’ $75.1 billion idle fund. By 2020, NPS is planning to raise its global assets ratio to over 30% from 16% last year.

The Bank of Korea reduced its benchmark interest rate at an all-time low of 1.5% and might further lower the base rate even more in the second half of this year to manage risks.

In May, South Korea’s army welfare fund, the $6.2 billion ......................

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