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Opening the gates
13 September 2007
The National Pension Service of South Korea is making a real push to diversify its portfolios. With the help of recent market legislation, the fourth biggest pension fund in the world is looking to go more global. Craig MacDonald reports.
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diversify
portfolio
national pension service of south korea
South Korea's National Pension Service (NPS) was established in 1988 under the partially funded benefit scheme, with a payment guarantee from the government of Korea.
NPS is the sole fiduciary for the administration of the national pension scheme and the management of the National Pension Fund (NPF). The NPF is a generic name for the pool of funds which NPS' Fund Management Centre manages.
It is the largest Asian public pension fund outside Japan. NPS has KRW207 trillion ($224 billion) assets under management as of June 2007.
The majority of the NPS' investments are in the financial sector, with the remainder in the welfare sector and a few others. The financial sector is divided into three types: fixed income (84.4%), equities (13.5%) and alternative strategies (1.6%). Not a very well diversified portfolio to say the least.
NPS has been involved in securities lending since 2005. It has...
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