On December 15, the Korea Teachers Pension Fund (KTPF) appointed David Park as chief investment officer to oversee the management of W13 trillion ($11 billion) of assets under management. In the same month the pension fund appointed six asset managers to run its domestic equity fund, after having conducted due diligence on 38 firms.
Park officially began his two-year tenure on January 2, replacing former CIO Park Min-ho. David was a former CIO at Allianz Life Insurance until mid-2016.
He was one of six candidates out of 28 applicants shortlisted by KTPF’s four-person interview board in early December. They had previously conducted a public recruitment process for the role rather than accept recommendations from the executive recommendation committee.
A key consideration when it came to filling the CIO position was the ability to generate positive returns over the long-term. Most school personnel in Korea work for at least 20 to 30 years, gradually saving more money with KTPF with the expectation of a healthy pension upon their retirement.
Park started his career as a fund manager at Samsung Life Insurance and worked as an asset management specialist at Samsung Investment Trust Management, HDC Asset Management (formerly I Investment Trust Management), and the Korean Federation of Community Credit Cooperatives.
In 2006 he moved to Allianz Life Korea as CIO, a position he held until mid-2016. Park departed shortly after Anbang Insurance Group of China announced that it had acquired Allianz Insurance Korea in April (a deal that was legally completed in December). It was unclear by presstime whether Park held a role between his departure from Allianz and his appointment by KTPF.
KTPF’s former CIO Park Min-ho has not been appointed to another position yet, but sources close to him say he is set to take a position in local asset management industry before long. He had been CIO since mid-2013 and completed his tenure at the end of 2016, following a contract extension of 18 months.
KTPF also divvied up its equities allocations among six fund managers last month. It appointed IBK Asset Management and Franklin Templeton Investments to run small- and mid-cap stock portfolios, hired DGB Asset Management and Macquarie Investment Management Korea to cover growth equity portfolios, and brought on Vision Asset Investment Management and Infinity Investment Advisory as investment advisers focused on growth stocks.
The pension fund has previously appointed multiple managers to run asset classes. In March 2016 it selected four local asset managers to advise on its overseas investments, with Shinhan BNP Paribas AMC and Heungkuk AMC advising on offshore fixed income asset investments and Kiwoom AMC and Korea Investment Management advising on active overseas equity.
As with most Korean pension funds, KTPF has been shifting its AUM away from low yielding onshore fixed income investments and into offshore and alternatives in recent years. As of the end of 2016, 33.3% of its AUM was invested into local fixed income assets, 28% was in local stocks, 8% sat in overseas fixed income, 8.5% was in offshore equities, and 20% was in alternative investments.
In June, KTPF's then-CIO Park Min-ho told the audience of AsianInvestor's 10th Korea Institutional Investor Forum that the fund had shifted its W13 trillion portfolio from a domestic/overseas ratio of 90/10 in 2013 to 80/20. Similarly, the Government Employees' Pension Scheme (GEPS) has also been shifting away from fixed income and into alternatives.
As part of this diversification drive, Korean pension funds have also looked increasingly into alternative assets, particularly into real estate and infrastructure. Anthony Fasso, Hong Kong-based chief executive for international at AMP Capital, told AsianInvestor in November that institutions from the country were leading a charge into infrastructure in particular.
KTPF has focused on expanding into overseas alternatives investments by seeking to partner up with other institutions looking at such investments, Park Min-ho told the AsianInvestor forum audience in June.