NPS names head of investment strategy

The National Pension Service (NPS) of Korea has appointed Lee Su-Cheol, previously head of domestic alternatives division, as the head of investment strategy, according to a person familiar with the matter.

Lee replaces Yang Young-sig who quit NPS last month to reportedly lead the private equity unit of South Korean brokerage NH Investment & Securities.

In his new role as investment strategy head, Lee will be in charge of NPS’s strategic asset allocation and acts as second in command after NPS chief investment officer Myoun-Wook Kang in the pension fund manager’s Investment Management department. Lee joined NPS in 2006 and previously led the strategic research team before heading the pension fund’s domestic alternatives unit in July last year.

Kim Jae-Bum will succeed Lee as the head of domestic alternatives at NPS and will manage the fund’s private equity, real estate and infrastructure investments in South Korea. He was previously the corporate investment team head under the domestic alternative investments division.

Lee’s appointment comes at a tumultuous time at NPS. On 28 December, the pension fund’s chairman Moon Hyung-pyo was arrested by a South Korean special prosecution team amid investigations into an influence-peddling scandal involving recently impeached South Korean president Park Geun-hye, according to reports by The Korea Herald.

The special prosecutor’s office did not immediately provide further details on the arrest of Moon but had said on Monday it raided Moon’s home on suspicion of abuse of power and perjury, according to Bloomberg.

The office is said to be looking into whether Moon had put pressure on the pension fund to support the $8 billion merger of two Samsung Group units last year while he was head of the Ministry of Health, which controls the NPS. Moon served as the country’s health minister from December 2013 to August 2015.

Moon denied exerting pressure on the state fund at a parliamentary hearing on 7 December but later reversed his statement and admitted he ordered the NPS to approve the deal during an interrogation by the independent counsel team, said the probe team's spokesperson, Lee Kyu-chul, as reported by The Korea Herald.

Investigators are also examining whether Samsung offered financial support as a bribe to Park’s close friend Choi Soon-sil for her businesses and foundations in exchange for favoring the merger. NPS was a major shareholder in Samsung Group affiliates Cheil Industries Inc. and Samsung C&T Corp. when they merged last year.

An NPS spokesperson confirmed investigations are ongoing but declined to comment further on the matter.

With 545 trillion won ($451 billion) under management at the end of September 2016, the NPS is the world’s third largest pension fund with investments worldwide spanning private equity, real estate and infrastructure.