Korea’s NPS back to square one in CIO search

The $565bn investor failed to find a qualified candidate among 16 applicants, in a recruitment process that started in February.

National Pension Service of Korea, the world’s third largest pension, is again looking for a chief investment officer after a four-month search failed to produce a qualified candidate.

NPS failed to select a CIO from 16 applicants and started a new recruitment process on 27 June, according to a statement. It is unclear whether the process will be completed within the year.

The CIO search committee shortlisted eight candidates in April and selected the top three for recommendation to NPS chairman and chief executive Kim Sung-joo, according to local media reports.

NPS, which has 634.6 trillion won ($565 billion; €489 billion) in assets, has been without a CIO for almost a year. Former CIO Kang Myoun-wook resigned from his post in July 2017 for personal reasons. He joined NPS in February 2016 and left the fund before his two-year term ended.

Cho In-sik has been serving as acting CIO since Kang left.

NPS has been increasing its exposure to overseas assets in the last few years. In March last year it said it planned to increase its holdings of foreign and alternative investments from 31.3 percent in 2017 to up to 40 percent by 2021. It has made fund commitments to Blackstone Core Equity Partners, VIG Fund III and Highland Capital Healthcare Fund, according to PEI data.

The pension is “more aggressive with its mid-cap strategy and plans to select four new GPs this year”, Choe Hyung-don, head of global private equity at NPS, said at the SK 2018 Private Equity & Debt Summit in Seoul in May. He added that the pension requires co-investments with buyout managers and will typically co-invest $100 million.

Buyouts accounted for 65 percent or about 4 trillion won of its private equity investments in the last year. North America and Europe made up 90 percent of its buyout allocations, while the remaining 10 percent was in emerging markets, he noted.

NPS has been hit with a slew of senior management departures since it moved its headquarters in early 2017 to Jeonju, which is in the southwest of the country and a two-hour train ride from Seoul. The move is part of the government’s plan to decentralise economic activities.

Khwarg Thae, former chief executive of SEI Assets Korea, a unit of Barings Asset Management Group; Lee Dong-min, ex-CIO for foreign reserves of Bank of Korea; and Yoon Young-mok, former head of strategy at NPS were the top three CIO candidates NPS had considered.