South Korea’s $450 billion National Pension Service (NPS) has installed a new chairman and chief executive, whose immediate task is to recruit a chief investment officer. Former health and welfare minister Moon Hyung-Pyo took up the CEO and chairman role on December 31.

This comes after a public spat broke out between the former chairman Choi Kwang and former CIO Hong Wang-Sun, with the government moving to replace both officials last year, as reported. Background on the dispute can be found here.

Moon himself was replaced as health minister last August amid criticism of the government’s response to the outbreak of Middle East Respiratory Syndrome between May and July that killed 36 people.

He had taken up the post in December 2013, and subsequently took up a post as research fellow at Korea Development Institute, an autonomous policy think tank set up by the government.

Local media reported that three people had applied for the CEO post at NPS, with Moon’s appointment widely anticipated. One of his primary tasks now will be to get a new CIO in place as soon as possible.

The recruitment process began in November and is expected to conclude this month. Given the acrimonious dispute between Choi and Hong, it is understood that NPS designed its search process to exclude candidates from a political background in an effort to avoid internal conflict.

In fact, there is a perception among local capital market figures that the public pension fund’s next CIO will be required to have a strong sense of professionalism and independence to resist – or at least be seen to resist – political pressure.

It is understood that such a perception has discouraged several potential candidates from applying for the CIO role, a hugely influential post commonly regarded as akin to president of Korea’s domestic capital markets. In late November it was reported that 18 candidates had filed applications, compared with 22 two years ago, when Hong was appointed.

AsianInvestor has learned that four have been shortlisted: Kang Myun-Wook, ex-CEO of Meritz Asset Management; 'Don' Lee Dong-ik, former CIO of sovereign wealth fund Korea Investment Corporation; Jeong Jae-ho, ex-CIO of the Korean Federation of Community Credit Cooperatives; and Kevin Kwon, former CIO of the Government Employees Pension Service.

One local source told AsianInvestor: “It is very difficult to know who will be in the driver’s seat at this point. Considering the recent conflicts between CEO and CIO, a complimentary and efficient relationship [between CEO and CIO] will be a key element in the final selection.”

Hong, a former vice-chairman of Hana Bank, will officially resign his position as CIO as soon as a successor takes office, AsianInvestor understands.