South Korea’s National Pension Service (NPS), the world’s third-largest pension fund, will speed up its private equity (PE) investments in the US tech sector via its San Francisco office to open in July, Chairman Kim Tae-hyun said at a keynote speech at The Korea Economic Daily's alternative investment forum ASK 2024 on Tuesday.
The fourth global NPS office, after affiliates in New York, London and Singapore, will focus on buyouts, growth and venture capital investment in Silicon Valley-based artificial intelligence and information tech companies.
The NPS managed 1068.5 trillion won ($782.2 billion) in assets as of end-February. Its private equity portfolio, comprising private equity funds, VC, hedge funds, credit and distressed debt, was valued at 70.5 trillion won, 78% of which is allocated to overseas assets.
The state-run fund will also expand its domestic PE portfolio. The pension fund has allocated 1.55 trillion won to new investment in the portfolio this year, 63% more than last year.
Kim highlighted that the NPS will start implementing its new asset allocation guideline next year, which will add flexibility to its current asset management system.
The long-term asset allocation standard raises the proportion of risky assets, such as stocks, to 65% of the entire fund while limiting safe assets, including bonds, to 35%.
On infrastructure investment, the pension fund will continue to focus on stable cash flow from core and core plus assets, while selecting new general partners for value-add assets, secondaries and mid-market companies to diversify revenue streams, the chairman noted.
In real estate, the NPS will expand high-demand lending from private companies and will increase investments in data centers and timberland, which have high growth potential and are resilient to economic volatility, Kim noted.
Write to Jihyun Kim at snowy@hankyung.com
Jennifer Nicholson-Breen edited this article.
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