Korea NPS ties prompt asset manager to set up dedicated office
Investment manager Franklin Templeton is to open a contact office in the South Korean city of Jeonju during the first half of this year as part of its efforts to strengthen its relationship and cooperation with the country's National Pension Service (NPS).
NPS is headquartered in Jeonju, a small city 200 kilometres south of Seoul in the province of Jeollabuk-do.
“NPS is one of our largest strategic institutional clients in Asia-Pacific," Tariq Ahmad, co-head of Asia Pacific at Franklin Templeton, told AsianInvestor. "The opening of a dedicated Franklin Templeton contact office in Jeonju is clear recognition of our commitment to NPS as we further strengthen our institutional presence in Korea.”
He said the company’s Jeonju office would supporting NPS by performing a liaison function for the public pension fund that would include market research and analysis.
“We are currently evaluating resources, leveraging the strong team which we have in Korea,” Ahmad said when asked about staffing plans for the new office.
BESPOKE SHOP
Franklin Templeton's Seoul office opened in 1997, and is home to investment and sales teams focused on servicing institutional clients. The firm's Jeonju office will be a contact office dedicated to supporting NPS by performing a liaison function, alongside market research and analysis.
“Franklin Templeton’s Jeonju office will not just strengthen their lines of communication and collaboration with NPS, but will also play an important role in the overall development of the local financial services sector and the wider community in Jeollabuk-do Province,” NPS chairman and chief executive Kim Tae-hyun said in a release from Franklin Templeton.
NPS has been managing its assets through Franklin Templeton since 2001, and currently uses its services to invest in asset classes including equities, fixed-income, private assets, real estate and infrastructure.
“We have liaison offices in other parts of the world catering to the needs of specific institutional clients,” Ahmad said, declining to name specific locations and clients.
Franklin Templeton established a South Korean joint venture named Templeton Hana Asset Management with Hana Financial Group in 2006, and in 2021 it entered a strategic partnership with Woori Asset Management.
DISRUPTIVE MOVE
Franklin Templeton’s move is a welcome step for NPS, which has faced challenges amid the relocation of its headquarters from Seoul to Jeonju, a process that started in 2017.
Former NPS chairman and chief executive Kim Sung-joo pushed for the relocation of NPS investment management’s headquarters to Jeonju as a member of a National Assembly health and welfare committee from 2012 to 2016, when he lost his parliamentary seat. President Moon Jae-in appointed him as head of the state-run pension fund in 2017.
Kim left NPS in January 2020, 10 months before the end of his term, so he could stand in a general election in April on the ticket of the ruling Democratic Party.
NPS was negatively affected by the relocation, which was followed by years of disquiet within its investment teams. The move led to an exodus of staff that didn’t want to move or commute to Jeonju, sources with knowledge of the matter told AsianInvestor.
A former investment professional at NPS earlier told AsianInvestor that the relocation had also created challenges for relations with asset managers and other contacts in the investment industry.
“Although we are the third-largest pension fund in the world, big asset manager names like Blackstone will not come down to Jeonju when their senior people visit Korea," the investment professional said on condition of anonymity. "We have to come and meet them in Seoul.”
NPS, which was managing W915.3 trillion ($724.7 billion) of assets as of October 31, 2022, suffered a cumulative loss of 5.29%, or W51 trillion, on those investments during the first 10 months of last year. That compared with a 7.06% loss after the first nine months of last year.
