Teachers’ Pension, a South Korean pension scheme for private school educators, has restructured its alternative investment organization on asset classes to provide more specialized asset management amid a rising exposure to such investments.
The scheme originally divided the division into two teams at the end of March, based on domestic and overseas alternatives. The local team was to set management strategies and invest in and manage domestic alternative assets like real estate, infrastructure, private equity, private debt and commodities, while the other team would do the same for overseas assets.
However, the division will now be split into two teams based on corporate financing and real estate infrastructure, it was reported on Thursday (July 16). The corporate financing team will handle domestic and overseas alternative assets like private equity, private debt and commodities, and the second team will handle overseas real estate and infrastructure.
The move comes as other South Korean pension funds restructure alternative investment organizations, with their exposure to alternative assets increasing in recent years.
Worth 1.98 trillion won ($1.64 billion) and 1.91 trillion won ($1.61 billion) respectively, domestic and overseas alternative investments accounted for a combined 21.4% of the 18.36 trillion won of assets under management by Teachers’ Pension at the end of 2019. In 2018 and 2017 they accounted for a respective 17.7% and 16.4% of assets under management. Teachers’ Pension plans to increase its exposure to alternative assets to 29.6% by 2024.
The state National Pension Service divided its alternative investment department on asset types at the beginning of 2019, setting up three divisions to handle private equity, real estate and infrastructure. Each division was recently divided again into teams based on Asia, Europe and the Americas, creating nine teams under three divisions. (Reporting by Hee-yeon Han)