More than a year after South Korea's National Pension Service moved to the countryside, in line with a broader government push to ease overconcentration in Seoul, the giant fund has yet to prove it can attract and retain a top-flight investment team in its new setting.
With the 634.6 trillion won ($561 billion) fund's CEO, Kim Sung Ju, predicting NPS' fast-growing portfolio will reach 1,000 trillion won by 2021, money management executives say this could prove an unfortunate moment for the fund's investment leadership to be in disarray.
Mr. Kim couldn't immediately be reached for comment.
Among big public funds in the region, NPS has been relatively innovative in pursuing investments in areas such as alternatives. But amid the internal turmoil since the fund relocated to Jeonju, three hours south of the capital, its capabilities have declined significantly, said one investment consultant in the region, who declined to be identified.
The head of client service with one of NPS' external managers, who likewise declined to be named, said the fund retains significant strengths, and its day-to-day operations are proceeding smoothly.
The concern is more whether, with NPS' leadership in considerable flux, the fund can remain as innovative in adapting and reacting to changing market cycles, the client service head said.
On that front, NPS was ahead of the curve three or four years ago — compared to other big public funds in the region, such as Japan's ¥156.4 trillion ($1.4 trillion) Government Pension Investment Fund and Taiwan's NT$4.097 trillion ($133.4 billion) Bureau of Labor Funds — but over the past year "that's changed a lot, dialed down quite a bit," he added.
NPS' last chief investment officer, Kang Myoun-Wook, resigned a year ago, soon after the NPS investment team's February 2017 relocation to Jeonju.
On July 4, Mr. Kang's acting successor, NPS' head of global private markets, Cho In-sik, announced he would leave the fund, opening another hole in a leadership lineup already lacking heads of domestic equities, global public markets and global alternatives.
A spokesman for the fund on July 18 said NPS filled those openings for now, with the fund's reduced pool of senior executives taking on double duties until permanent replacements can be found.
Executives wearing two hats as of this month are:
Lee Soo-Cheol, the fund's head of investment strategy, has taken on the role of acting CIO as well, while a search launched on July 5 for a permanent CIO is underway.
Lim Hyeong-Ju, the head of NPS' global equity external management team, assumed Mr. Cho's other role as interim head of global private markets.
Kim Jong-Hee, NPS' head of domestic fixed income, also will serve as acting head of domestic equity.
The NPS spokesman declined to comment on the impact investment team turnover is having on the fund's ability to put net inflows exceeding $3 billion a month to work.
But if recent turnover has pinched NPS' operations, the fund's latest results offered no hints of distress. NPS' annual report for 2017, released on July 6, showed the fund delivering a 7.26% return for the year, its best showing since 2010, helped by growing allocations to equities, alternatives and overseas markets.
