Korea’s NPS hires new CIO, tipped for mandate wave
Korea’s National Pension Service has ended its 15-month wait for a chief investment officer, at a time when the huge fund is seen to be growing more active in seeking asset managers for new overseas mandates following a period of upheaval.
After a number of false or tentative reports across recent months that a new CIO had been appointed, several news channels reported yesterday (October 8) that Ahn Hyo-Joon has taken up the role. He was formerly president of BNK Holdings, a financial holding company based in Seoul, said reports.
Ahn has been named as CIO on the NPS website, but the institution did not respond to a request for comment on his appointment yesterday evening. He also worked for NPS for around three years, most recently as head of domestic equity.
In addition, Ahn has also served as CEO of Kyobo Axa Investment Managers, a joint venture between Kyobo Life Insurance and Axa Investment Managers.
A permanent executive in the CIO role appears much needed after the W643 trillion ($569 billion) fund posted a return of just 0.9% in the first half of this year – something AsianInvestor hinted at in July.
INTERNATIONAL AMBITIONS
Ahn takes over NPS's investment plans at a time the pension fund is seen as well set for a return to greater activity in global markets.
The fund is “consistently a player” in international investments, but had taken something of a break for 18 months, said one sales head at a large global fund house. This came amid personnel changes and the controversial move of its investment management office from Seoul to Jeonju, Jeolla province, which led to the departure of a raft of staff.
It's open knowledge that NPS has had trouble attracting senior investment executives to its investment operation, which is a 120-mile commute from downtown Seoul. The rural location includes several manure handling facilities, which has caused complaints about malodorous air, according to the Wall Street Journal.
Despite this, the pension fund has been adding a set of younger personnel. And it now appears to be “back in the game”, the sales head noted; it has been very active in recent months seeking managers for mandates, notably for overseas assets.
The new CIO is seen as having strong relevant experience in this regard. Ahn’s time as head of global public markets at NPS and his experience with international financial institutions such as Kyobo Axa are seen as underlining his suitability for the post.
Thirty candidates applied for the position and there were only three finalists, said an investment consultant familiar with Korean institutional investors, without identifying them. “Some in the industry think he’s well positioned compared to other two finalists in terms of investment experience, especially overseas investments,” he added.
LONG-AWAITED APPOINTMENT
The appointment has been a long time coming. The market has been “desperately” waiting for a decision on the new CIO, noted the consultant, as is reflected by the amount of speculation and articles about who would be taking the role.
And NPS has seen at least two acting CIOs following the resignation of the last permanent incumbent, Kang Myoung-wook, in July 2017.
Since then, various names have been mooted for the post, only to prove false alarms. For instance, in April this year it was reported that Thae Khwarg, a former head of Barings’ South Korean asset management arm, was “highly likely” to be named as CIO.
Clearly, then, Ahn has a big job ahead of him. There are various issues to sort out over the next couple of months and years at NPS, noted another consultant on condition of anonymity. That is clear from the level of turnover at the fund in recent years; an experienced hand on the tiller is very welcome.