April 20, 2024

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South Korea’s pension fund National Pension Service said on Dec. 4 it has picked five investment houses and earmarked some 200 billion won ($167.6 million) for its investment in startups, in a bold move to increase exposure to alternative assets.

Knet Investment Partners, Premier Partners, IMM Investment, K2 Investment and SV Investment will become general partners for the venture fund. The result came three months after the public notice calling for request for proposals, mainly to domestic venture capital firms.

This will add to NPS’ 82.6 trillion won allocation to alternative assets, out of 713 trillion won asset under management as of end-September.

“(NPS) will continue to increase its investment in alternative assets as part of portfolio diversification in order to ensure stability in its long-term yield,” NPS Chief Investment Officer Ahn Hyo-joon said in a statement.

In the meantime, NPS this month will also announce a partner for 100 billion won co-investment funds to invest in real estate assets in Korea.

In July, NPS secured three local partners -- KB Securities-Nau IB Capital consortium, NH Investment & Securities-Opus Private Equity consortium and Eugene Asset Management -- for a 400 billion won fund dedicated to special situations and distressed assets. It also picked four partners -- H&Q Korea Partners, SG Private Equity, VIG Partners, Praxis Capital Partners -- for a 600 billion won mid-cap private equity fund.

NPS is the world’s third-largest pension fund. In September, its alternative exposure came to 11.6 percent, up 0.8 percentage point compared to a year earlier.

By Son Ji-hyoung (consnow@heraldcorp.com)