The National Pension Service of Korea (NPS) has expanded the roles of its strategy research team in a move seen as part of the pension fund’s efforts to respond in an agile way to fast-changing investment conditions.
NPS revised operational rules for its Investment Management department to add responsibilities for the strategy research team, according to an announcement posted on its website on August 28.
The state pension fund created the team in 2016 as a sub-unit under its investment strategy division. This was aimed at achieving higher returns in a low-interest rate environment by enhancing its market analysis capacity and focusing on more diversified asset allocations as the fund’s total assets topped 500 trillion won ($430 billion).
Responsibilities of the strategy research team previously included analysis and forecasting of the domestic and global economies and financial markets, the analysis and forecasting of alternative investment assets and studying the management of other global pension funds on a regular basis.
The team now has taken on four additional responsibilities: monitoring house views on markets to support asset allocation strategies, performing scenario analysis to support risk management, developing a set of capital market assumptions and identifying and evaluating new investment opportunities.
The expanded scope of its work reflects the pension fund’s intention of strengthening its risk management capabilities to build greater resilience against unexpected shocks such as the Covid-19 pandemic, industry watchers said.
NPS has been increasing its allocation to foreign investment assets and alternative assets in the search for higher returns. Its assets under management stood at 752 trillion won at the end of June this year. (Reporting by Hee-yeon Han)