NPS seeks advisory firm to monitor overseas alternative investments Korean state pension fund intends to continue to boost alternative investments abroad

Translated by Ryu Ho-joung 공개 2021-11-02 08:07:49

이 기사는 2021년 11월 02일 08:04 더벨 유료페이지에 표출된 기사입니다.

South Korea’s National Pension Service (NPS) has issued a request for proposals seeking an advisory firm to help it monitor its overseas alternative investments, as the pension fund is ramping up efforts to increase its exposure to the asset classes.

To be eligible to submit a proposal, firms should have five years or more experience in asset monitoring services for limited partners, with experience of providing such services to more than 10 institutions.

The request for proposals came as the NPS’ wants to double down on alternative investments abroad. The selected firm will be responsible for monitoring NPS’ overseas alternative investment portfolio and providing the pension fund with reports on a daily, monthly and annual basis.

NPS invested in 491 overseas alternative investment funds at the end of June this year, with commitments totaling $111.5 billion, of which $71.7 billion was drawn down.

Specifically, $41.8 billion was invested in 217 private equity funds, with $24.3 billion called by general partners. The pension fund committed $26.6 billion in 119 infrastructure funds, $17.8 billion of which was drawn down. For real estate, $43 billion was committed to 155 funds, with $29.5 billion called for investments.

NPS intends to continue to boost overseas investments and alternative investments in an effort to enhance returns. At the end of June this year, the pension scheme’s exposure to private equity, real estate and infrastructure – both domestic and international – stood at 35.4 trillion won ($30 billion), 33 trillion won and 26.2 trillion won, respectively. The overseas portion of each asset class accounted for 60%-70%.

NPS added seven more foreign alternative managers in the first half of this year, after adding 14 managers to its foreign alternative manager roster in 2020. In contrast, the pool of managers overseeing its domestic alternative investments reduced by four in the first half of this year and by five in the full 2020 year.

The pension fund had approximately 930.5 trillion won in assets under management at the end of August 2021, with exposure to alternative investments accounting for 98.5 trillion won or 10.6% of the total assets. (Reporting by Hee-yeon Han)
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