The National Pension Service (NPS) is ramping up its investment in alternative assets, as it tries to overcome the difficulties caused by the coronavirus pandemic.
NPS’ alternative investments reached 89.92 trillion won ($75.2 billion) as of the end of April, up 5.6 trillion won – equivalent to more than 70% of the net growth of last year – from 84.295 trillion won at the end of last year.
NPS’ aggressive overseas alternative investment is cited as a main reason for this growth. Although business travel and on-sight due diligence have come to a standstill due to the virus, NPS has successfully pursued a series of large-scale overseas alternative investment projects with other global pension funds and managers.
For example, the pension fund, which aims to increase its allocation to alternative investments to 13% by the end of this year from last year’s 11.4%, announced a plan to establish a $2.3 billion joint venture with Allianz Group to invest in real estate assets in Asia last month.
A month earlier, it had set up a consortium with Dutch pension manager APG Asset Management to acquire a Portuguese toll road concessionaire Brisa and also acquired 49.5% stake in One Madison Avenue, one of Manhattan’s largest office buildings, with global real estate development firm Hines Interests Limited Partnership.
Meanwhile, NPS Investment Management Committee is now seeking to diversify its overseas investment destinations, from developed countries in America and Europe to major developed countries in Asia and other emerging market countries with high-growth potential. (Reporting by Hyewon Chang)