Korea’s Government Employees Pension Service (GEPS) has begun a public recruitment process for a new chief investment officer, and competition for the post is expected to be fierce.
Separately, the $6.26 billion fund has seen its head of overseas investment, Kim Youngsung, leave to head the newly created global investment division at local firm KB Asset Management. He left in December and told AsianInvestor that his new remit is to find strong offshore asset managers to help run mandates and products for local clients.
GEPS appointed Oh Youngsoo to replace Kim on February 28. She was previously head of the New York representative office of Korean state retirement fund National Pension Service.
GEPS’s previous CIO, Choi Young-Gwon, stepped down to take up the role of chief executive at Seoul-based Hi Asset Management; he will start on April 3. He had been CIO at GEPS since July 2014, having been appointed for a two-year term with the option of a one-year extension.
A big question is whether GEPS’s new hire will maintain Choi’s progressive investment strategy. That seems likely, according to industry observers.
A senior executive at another Korean asset owner said the new appointee would need a strong background in equity and alternative investments, as well as some global experience. This is because GEPS needs to increase its alternatives and international exposure to achieve its target returns, he noted.
Choi was a big advocate of building allocations to alternative and foreign investments with a view to boosting diversification and performance. On his watch GEPS implemented a strategy to almost double its foreign asset exposure to 30% by 2020 from 16% in 2015 and raise its alternative allocation from 16.9% to 24.3% between 2016 and 2021, mainly at the expense of domestic fixed income.
GEPS had invested $765 million in alternatives as of the end of November 2016, which will rise to $1.56 billion by the end of 2020, according to a local media report. Last year, for instance, the fund moved to hand out its first mandate for private equity secondaries.
The deadline for submissions for the CIO post is 12 noon on March 20 – this coming Monday. Candidates must have at least 10 years’ experience in the asset management business. GEPS will make its choice by March 28 and officially confirm the appointment in April.
Industry observers expect there to be strong competition for the role, citing the recent experience of another local retirement institution. Korea Teachers Pension Fund assessed 28 applicants for its CIO vacancy and shortlisted six candidates late last year, before choosing David Park, a former CIO of Allianz Life’s Korean business.
As of November of 2016, the fund had $2.44 billion (39%) in fixed income, but only $121 million of that was in overseas assets. Equity accounted for $1.67 billion (26.63%) of its AUM, of which $467 million was in foreign stocks. These figures are from a media report; GEPS could not be reached immediately by press time to confirm the data.