Korea's NPS allocates $610m to local PE fund managers

The state investment fund’s announcement comes amid a management reshuffle in its alternatives division.

South Korea’s National Pension Service (NPS), which manages $442 billion of assets, has selected four domestic private equity managers to manage KRW 700 billion ($610 million; €550 million) of its funds.

VIG Partners and Skylake Investment will each receive KRW 250 billion to invest in large-cap companies, while Lindeman Asia Investment and SG Private Equity will be allocated KRW 100 billion each to invest in mid-sized companies, NPS said in an announcement.

Korean private equity managers NPS had previously committed capital to MBK Partners, IMM Private Equity, Unison Capital, and Mirae Asset Management, according to its 2015 annual report.

The pension fund has also announced changes to its alternatives division.

In a statement, NPS said Young-Sig Yang, who previously led the global alternatives division for the pension fund, is now the head of investment strategy. A report from Korean Investors added that Yang will be responsible for strategic asset allocation, as well as environmental, social and corporate governance in his new role.

Meanwhile, Sang-Hyun Yoo, a former domestic alternatives head, will become the new head of its global alternatives division.

Earlier this year, NPS had also revealed plans to increase its alternatives exposure, from 10.7 percent in 2015 to 11.5 percent by the end of 2016.

Last year, NPS upped its alternatives exposure by as much as 17.2 percent, compared with the previous year.

Alternative assets accounted for KRW 54.7 trillion of its total portfolio, with KRW 9.1 trillion distributed to private equity, KRW 7.1 trillion to infrastructure and KRW 15.5 trillion to real estate.

In other news, NPS also announced it will appoint eight private equity firms to manage venture capital funds that will invest in start-ups.

Kang Myoung-wook, chief investment officer at NPS, had previously said the fund plans to raise its exposure to stocks of small and medium enterprises.