NPS plans to outsource investment of ￦132T

The National Pension Service, a heavyweight investor, plans to entrust 132 trillion won ($144.18 billion) to outside asset managers next year.

The Ministry of Health and Welfare, which oversees the agency’s operations, announced yesterday that the massive pension manager will outsource the investment of 33 percent of its 396 trillion won in financial assets by the end of 2012.

This represents a greater ratio of funds handed over to external management than was the case this year, when 29.9 percent of the NPS’ financial capital, or 93.3 trillion won, was invested by a third party.

However, the ratio remains the same for domestic stocks, foreign bonds and the management of existing investments at 55 percent, 60 percent and 80 percent, respectively. These are expected to reach 42.1 trillion won, 9.7 trillion won and 29 trillion won, in turn, by the end of 2012.

The NPS is slated to outsource the management of more of its domestic bond investments next year, up from 8.5 percent to 10 percent, while scaling back its reliance on outside parties for managing its foreign stock investments, down from 90 percent this year to 85 percent.

“[The NPS] outsourced all of its of foreign stock management until 2009, but we have been minutely expanding the ratio of directly managed investments to make our portfolio more flexible,” the Health Ministry said yesterday.

“Regarding the management of our foreign bond investments, we did not expand the ratio of outsourcing .?.?. due to the uncertainties facing the global economy.”

Consulting service Towers Watson said the NPS again ranked as the world’s fourth-largest pension in September with 290 billion won in assets.

The NPS went through an extensive reshuffle of key investment personnel after charges arose that it used its position to coerce local securities brokerages into providing favors such as footing the bill for petty costs.

By Lee Jung-yoon [joyce@joongang.co.kr]