South Korea’s capital market participants are paying attention to whether Ahn Hyo-joon will be able to serve for one more year as a chief investment officer (CIO) of  the National Pension Service (NPS), with his two-year term expiring in October. The CIO term of the biggest institutional investor in South Korea can be extended for one additional year depending on his or her performance. 

NPS CIO Ahn Hyo-joon

Ahn was appointed CIO in October 2018, filling the 15-month vacancy of a powerful position at the world’s third-largest pension fund. NPS handles 726 trillion won ($607 billion) as of end of April. 

Ahn served as fund manager of BEA Union Investment in 2007 before serving as overseas securities chief and stock management manager at NPS in 2011. He was also the chief executive officer (CEO) of Kyobo AXA Investment Managers in 2013 and became CEO of BNK Securities in February 2016. 

While working as a NPS CIO, Ahn has made various efforts to improve returns despite the shortage of manpower. The most notable example is his efforts to expand alternative and overseas investments to raise long-term returns. To that end, he innovated decision-making processes to speed up investment decisions in 2019.

Partly due to this effort, NPS recorded the strongest annual return of 11.31% in its history last year, reversing a negative 0.92% return in 2018. Its return moved between 2.3% and 7.3% from 2011 to 2017.

NPS makes it a rule to run recruitment advertisements three months before the expiration of its CIO term. But as it has not yet done so, market players are increasingly putting more weight on the possibility of an extension to Ahn’s term. Some predict that NPS, which emphasizes the organization’s operational stability, won’t find it easy to replace the head of investment management especially when the position of its CEO is still vacant after ex-CEO Sung-joo Kim resigned in January to run in a general election. 

“Considering the status of NPS in the industry, we can’t help but pay close attention to the position of its CIO,” an industry source said. “Since it has been operating smoothly under the leadership of Ahn, there seems no reason not to extend his term one more year.”

Ahn is the eighth CIO of NPS Investment Management since its launch in 1999. Among the previous CIOs, only two worked for three years. (Reporting by Heeyeon Han)