The National Pension Service of Korea (NPS) has reportedly unveiled plans to open an Asian investment office in 2015, likely to be based in Hong Kong or Singapore at a committee meeting led by chairman Moon Hyungpyo.
The move is part of the firm’s plan to set out the fund’s investment strategy and priorities for the next five years to 2019.
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As part of the plan, NPS is planning to improve its global investing approach, risk management and internal infrastructure as well as increase its proportion of overseas investment to a quarter of its total AUM by 2019, reported Asian Investor.
Also, NPS said that its total investment into global stocks is expected to grow to at least 15% ($110bn) by 2019 from 11.3% ($45.5bn) this year.
The committee said it is planning to concentrate more on risk-free and passively managed assets and also launch new financial instruments such as hedge funds to achieve its diversification target.
In addition, NPS is seeking to launch an office next year for investing in Asian markets and also set up an integrated control system for foreign exchange to manage risk.
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By GlobalDataFurthermore, the firm plans to recruit fund management specialists and support staff in its overseas offices in London and New York.
NPS also aims to increase outsourcing of its domestic fixed income assets by increasing allocation of its domestic bond exposure to private asset managers to 10-14% from 8-12% to manage interest rate volatility.
It will also reduce the percentage of overseas equities it outsources to private asset managers to 70-90%, from 75-95% previously.
With $455bn in assets under management, NPS also intends to hire a further of 65 portfolio managers in 2015 boosting its staff from 161 to 226 by the end of next year in addition to changing its staff incentive structure.
