NPS picks Allspring, BlackRock, Morgan Stanley for multi-assets in Q4

It has started its first multi-asset investment with $1.5 billion and will build platforms for tactical asset allocation

Ahn Hyo-joon, CIO of NPS (Courtesy of Institute for Global Economics)
Ahn Hyo-joon, CIO of NPS (Courtesy of Institute for Global Economics)
Jae-fu Kim 2
2022-02-28 17:29:28 hu@hankyung.com
Pension funds

National Pension Service (NPS) of South Korea said on Feb. 28 it hired Allspring Global Investments LLC, BlackRock Inc. and Morgan Stanley Investment Management (MSIM) Inc. in the fourth quarter of 2021 for the pension fund’s first multi-asset investment firms. The world’s third-largest pension fund said it has deployed a combined $1.5 billion of capital, $500 million to each investment firm.

US-based Allspring manages $587 billion in assets, focusing on multi-asset solutions, defined contribution plans, target date investment, retirement income and others. BlackRock, the world’s largest investment firm managing $10 trillion in assets, operates multi-asset strategies across global equity, fixed income, currency, commodities and alternative investment markets. MSIM, with a $1.6 trillion AUM, uses various multi-asset strategies including absolute return, global tactical asset allocation (TAA), multi-asset income and dynamic value.

NPS conducted an initial evaluation for some overseas multi-asset investment firms during the first half of 2021. The pension fund underwent quantitative and qualitative analysis and due diligence to select the three investment firms, it stated on Monday.  

The pension fund’s multi-asset investment is a preparatory stage for introducing tactical asset allocation (TAA) overlay strategy, NPS said. The strategy, broadly used by pension funds in North America and Europe, actively manages portfolios for extra values by adjusting shareholding percentages in equities, bonds and other assets.

Once introducing the strategy, NPS will quickly respond to market trends while reducing changes to its investment portfolios, the pension fund stated. The strategy could boost the efficiency of investment management by minimizing the impact of market shock and opportunity costs, as well as enhance investment diversification.

“NPS and the three investment firms have agreed to build platforms for advancing our TAA system. We will develop economic and market indicators, create a quantitative assessment model for asset allocation and operate programs for successful partnerships,” the pension fund’s Chief Investment Officer Ahn Hyo-joon said.

On Monday, NPS announced its annualized return in 2021 was 10.86%, the second-highest record following an 11.3% return in 2019. The alternative investment generated a 23.97% return, thanks to gain on valuation of private equities and bonds and exits from some domestic real estate assets. The pension fund’s AUM increased to 948.7 trillion won ($786.3 billion won), 115 trillion won up from 2020. 

Write to Jae-fu Kim at hu@hankyung.com
Jihyun Kim edited this article.

NPS posts 24% return from alternative investment in 2021

NPS posts 24% return from alternative investment in 2021

National Pension Service of Korea National Pension Service (NPS) of South Korea posted a 10.86% rate of return in 2021, according to a preliminary data report by its investment management arm on Feb. 25. Following an 11.3% return in 2019, the 2021 record is the second-highest return since the

NPS posts 7.6% return as of October 2021

NPS posts 7.6% return as of October 2021

National Pension Service of Korea South Korea’s National Pension Service (NPS) posted a 7.6% rate of return as of October 2021, according to a preliminary data report by its investment management arm. By asset classes, NPS’ overseas equities achieved a 27% rate of return, while alte

Thoma Bravo may attract $200 mn from NPS, KTCU

Thoma Bravo may attract $200 mn from NPS, KTCU

Thoma Bravo headquarters building at 150 North Riverside, Chicago (Courtesy of 150 N Riverside) National Pension Service (NPS), Korean Teachers’ Credit Union (KTCU) and other institutional investors of South Korea are likely to contribute to a $22 billion fund of US private equity firm Th

NPS approves POSCO's split into holding firm, steelmaker unit

NPS approves POSCO's split into holding firm, steelmaker unit

POSCO Group headquarters The National Pension Service (NPS) of Korea, the largest shareholder of POSCO Co., has given its nod to the steelmaking giant’s plan to split into a holding company and a steelmaking company. As six out of nine members of an NPS committee on Jan. 24 approved the

NPS and six Korean LPs commit $730 mn to Ardian's infra secondaries

NPS and six Korean LPs commit $730 mn to Ardian's infra secondaries

Ardian SA Seven South Korean limited partners have committed $730 million to Paris-headquartered alternative asset manager Ardian SA’s secondaries fund ASF VIII Infrastructure, three sources familiar with the matter told The Korea Economic Daily. Ardian launched the $4 billion fund target

(* comment hide *}