The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
Officials at the NPC in Seoul say the W190 trillion ($200 billion) institution has appointed the two firms to not only manage money but provide a deeper level of training and technology transfer than is normally the case.
"We want a deeper relationship with global fund managers," says an NPC official. "We want more practical help." This extends from asset-allocation decisions to middle- and back-office support, allowing the NPC to second staff to the managers's operations for longer periods of time. "We want our staff to get hands-on experience.
The agreements may also include providing the NPC with superior information technology. In return, Credit Suisse and Morgan Stanley are first in line for additional mandates for managing NPC assets, although they do not enjoy any exlusive relationships.
The next objective for the NPC is emerging markets. The organisation has been at the forefront of overseas investing among Korean institutions. It organised a process of awarding investment mandates to external managers for core asset classes including global equities and global fixed-income, and last year spent a lot of energy on gaining access to global private-equity and real-estate funds. But NPC officials would not say whether Credit Suisse and Morgan Stanley have a leg up on winning some of these mandates.
Now, having learned the ropes for investing in developed markets, the NPC wants to tap opportunities in emerging markets. It is now in the process of hiring three managers for $200 million worth of mandates in global emerging markets, using the MSCI Emerging Markets Index ex-Korea as a benchmark.
The NPC continues to use both Watson Wyatt and Mercer Investment Consulting to help draw up shortlists. In previous outsourcings it relied on both firms for assistance; now it rotates business among them, and also uses its own list of managers which it has developed through its recent experiences.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.