The Government Employees Pension System (GEPS) plans to spend about 300 billion won ($267.7 million) on new alternative investments this year as it steps up efforts to diversify away from traditional stocks and bonds, according to sources.
This would bring its exposure to alternative assets to 2.05 trillion won by the end of the year, or 24.7% of the fund’s investment portfolio (excluding reserves).
GEPS’ investment portfolio is expected to increase to 8.3 trillion won this year. The fund has continued to raise its allocation to alternative assets for the last five years, with the proportion rising from less than 14% in 2015 to 20% in 2020.
It has also been focusing on increasing overseas investments for a number of years, with the proportion exceeding 50% in 2018 and 54.6% in 2019.
GEPS plans to award alternative investment mandates to domestic and foreign managers this year. Dominus Investment, IMM Private Equity and SG Private Equity were each awarded a private equity mandate of 40 billion won in January 2020. (Reporting by Ar-rum Rho)