The chief investment officer, chief operating officer and chief risk officer of Korea’s $90 billion sovereign wealth fund are all stepping down, as the new chief executive moves to overhaul its structure and management style.
Eun Sung-Soo took office as chairman and CEO last month, replacing ‘Hank’ Ahn Hong-chul, who left Korea Investment Corporation (KIC) in November, a year before his contract had been due to finish. The fund had violated internal guidelines on his watch, as reported.
Choo Heung-sik had been named CIO in March 2014, having previously served as director general and head of reserve management group at Bank of Korea. the country’s central bank. Kim Young was re-appointed as COO last year, having first assumed the role in September 2011. Hong Taegki had become CRO in April 2012 and was re-appointed in April 2015.
All three were all either recruited and/or re-appointed by Ahn and will retain their posts until their successors have been decided on.
Eun has been quoted as saying KIC would implement high-level internal reform to improve its performance. He has also said the fund would not seek to raise its alternative investment allocation to 25% by 2020, as had been Ahn’s plan, but would cut the target to 20%, due to concerns about the fund’s level of risk.
KIC will launch a public recruitment process for the CIO and CRO posts immediately, which is typically how it has filled those roles in the past. The COO has tended to be appointed via internal promotion. It is likely to take at least three months before the positions are filled given past experience, say industry observers.
A local industry source told AsianInvestor that this sudden move had been coming since Eun's inauguration last month. He said he expected KIC's future investments would be “more prudent but targeting better performance”.
Korea’s National Pension Service has also undergone a recent senior management reshuffle, with the $430 billion state retirement fund naming a new CEO and CIO after their predecessors left following a spat.
AsianInvestor argued last month that Korean state institutions should focus more on how senior incumbents perform than sticking rigidly to terms limits.