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Pension funds

KIC sees 11 alternative investment managers resign by November

Almost one-third of its total 35 investment managers have left the fund amid fierce salary competition

By Nov 25, 2021 (Gmt+09:00)

KIC sees 11 alternative investment managers resign by November


Korea Investment Corporation (KIC) saw as many as 10 professionals of its alternative investment division resign from the South Korean sovereign wealth fund by September of this year, a report announced by Korea’s National Assembly member Park Hong-keun showed.

Including Cha Hoon, the former real estate team head who recently left KIC, a total of 11 had left the alternative investment division by November. Former private equity team head Jay Huh also left KIC to become private equity head of Asia Infrastructure Investment Bank in April. 

The division manages four teams: private equity, real estate, infrastructure and absolute returns. It employs a total of 35 investment managers, of which 11 resignees are not a small portion.

According to the report, the numbers of alternative investment division resignees were nine in 2017, seven in 2018, six in 2019, four in 2020 and 10 by September of this year. Among a total of 21 employees who left KIC this year as of September, 15 were from the investment management unit consisting of three divisions -- alternative investment, public markets and investment strategy & innovation.

As The Korea Economic Daily reported in early November, KIC Deputy Chief Investment Officer James Jongho Kim is still in charge of the real estate investment team while the sovereign wealth fund is seeking a new team head. Given that KIC aims to increase its alternative investment proportion from the current 15.3% to 25% by 2027, the outflow of alternative investment professionals could be a concern. KIC’s assets under management were $183.1 billion as of end-2020.

National Pension Service (NPS), the world’s third-largest pension fund with 930 trillion won ($781.8 billion) assets under management, is facing similar challenges. Its head of infrastructure investment Kim Jee-Yeon and head of real estate investment Kim Hyun-Soo have recently tendered resignations and will officially leave the pension fund at the end of November. As alternative investment has been more active in the pandemic, salary competition for alternative investment experts is becoming fiercer and is driving the outflow of professionals, a pension fund source said.

To secure its core members as well as celebrate recent high performances, NPS is expected to dole out bonuses averaging 75 million won to its investment portfolio managers for this year. In July, NPS approved the payments of an average of 86.7% of annual salaries to its investment managers based on the pension fund's three-year performance from 2018 to 2020. The bonus for its Chief Investment Executive Ahn Hyo-joon was set to be 98.4% of his annual salary.

Write to Jihyun Kim at snowy@hankyung.com

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