Korea’s National Pension Service has appointed a new acting chief investment officer after his predecessor Cho In-sik resigned earlier this month, as the upheaval continues at the $564 billion fund.

NPS has also appointed a new domestic equity head, after the previous one was dismissed on July 3. 

Lee Soo-cheol became acting CIO on July 13 in addition to his role as head of investment strategy, a spokesman for NPS told AsianInvestor. The country's flagship retirement scheme has invited applications for the CIO position on July 5, with a deadline for applications of Thursday July 19.

Lee replaces Cho, who is leaving the fund after less than a year in a role that is proving difficult for NPS to fill on a lasting basis. 

Cho himself had only taken on the role – in addition to his post as head of global private markets – after the resignation of CIO Kang Myoun-wook in July last year, before finishing his two-year term. 

Lim Hyeong-ju has assumed the role of head of global private markets on July 13, in addition to his duties as head of the global equity external management team.

Cho In-sik

The spokesperson declined to comment on the reasons for Cho’s departure, and would only say that an exit date had not yet been confirmed.

Local media reports suggest the departure is connected to the latest internal audit over NPS’s support of a controversial merger between two Samsung affiliates in 2015.

Cho reportedly recently received a warning from the human resources committee for criticising an NPS staff member who cooperated with the prosecution in its investigation into the Samsung case.

In another change, Kim Jong-Hee, the head of domestic fixed income, has taken on the additional role of head of domestic equity effective July 1. This follows the dismissal of the previous local equity head after an internal audit, the spokesman said, declining to provide further details.

TURBULENT TIMES

The latest changes follow a turbulent few years at NPS, which has been caught up in the corruption scandal that led to the impeachment of President Park Geun-hye. 

In 2016, its chief executive and chief investment officer had a very public dispute, which was followed by the arrest of the chairman on corruption charges.

Other senior departures have followed, with the staff outflow believed to have been accelerated by NPS IM’s move to Jeonju, a town situated two-and-a-half hours' drive from Seoul.

Earlier this year, AsianInvestor named Cho as one of Asia’s top 20 pension executives for his efforts to usher in relative calm by continuing a string of investment mandates and staying focused on risk management.

There are now questions over whether there will be changes to allocation plans. 

In June, NPS awarded three real estate mandates collectively valued at $533 million, according to media reports. The spokesman declined to comment on whether these mandates would be put on hold. 

The fund says in its current portfolio overview statement on its website that it plans to scale down its allocation to domestic fixed income and increase investment in domestic and foreign equities and alternatives.

As of April 30, the pension fund had 21.2% of its investment assets in domestic equities, 17.7% in global equities, 46.3% in domestic fixed income, 3.7% in global fixed income and 10% in alternatives.