NPS to expand listed REIT, private debt investments

South Korea’s National Pension Service (NPS) will increase investing in real estate debt and listed real estate investment trusts (REITs) next year, Chairman Kim Tae-hyun said at ASK 2023 in Seoul on Wednesday.

The world’s third-largest pension fund will expand its overseas alternative investments for risk diversification, the chairman noted in a keynote speech session at the biannual forum on global alternative investments.

The pension giant will continue to focus on core and core plus strategies in real assets, which generate relatively stable cash flow and are more resilient during economic fluctuation, Kim said.

NPS will also employ value-added, secondary and infrastructure debt strategies to boost profitability while investing in the digital and renewables sector for portfolio diversification, he added.

The pension fund will take a selective approach to private equity and loans. It is looking for secondaries that provide a faster exit to investors, as well as distressed debt funds that can be attractive in market dislocation, he said.

NPS is managing 990.6 trillion won ($735 billion) as of July 31. Alternative assets make up 15.7%.

Since it tapped into the global alternative markets in 2008, its overseas assets have risen to account for 83.3% of its alternative investment portfolio last year.

The pension fund will strengthen its risk management strategy and enhance returns amid growing uncertainties in the global economy, the chairman said.

Write to Jihyun Kim at snowy@hankyung.com

Jennifer Nicholson-Breen edited this article.