Yellow Umbrella's new CIO to spur alternative investment

The Yellow Umbrella Mutual Aid Fund, a 25.4 trillion won ($18.5 billion) savings arm of South Korean small business owners, has tapped an alternative investment expert as the new chief investment officer.

The mutual aid association appointed Suh Won-cheol, a former MG Non-life Insurance Co. asset management head, as the new CIO last week, banking sources said on Wednesday. He will serve a two-year term with a chance to extend in one-year increments based on performance.

Prior to MG Non-life Insurance, Suh headed the alternative investment division of Government Employees Pension Service (GEPS) for six years from 2013. 

He also served as private equity head at now-defunct Korea Development Bank (KDB) Daewoo Securities, which has become Mirae Asset Securities Co., Korea head of Bank of America (BofA) Securities and global alternative investment head of National Pension Service (NPS).

Suh earned a bachelor’s degree in business economics and public policy and a master of business administration from The George Washington University.

Among about 40 candidates for the CIO position, Suh was one of the three finalists with Teachers’ Penson (TP) ex-CIO Lee Kyu-hong and sovereign wealth fund Korea Investment Corporation (KIC) former Executive Vice President Kim Sang-joon. 

Yellow Umbrella aims to allocate 29.8% of its assets under management (AUM) to alternative investment this year, with 50.4% exposure to fixed income, 16.6% to stock and 3.2% to short-term securities. 

While the previous CIO Lee Do-yoon led the fund for three years from May 2021, Yellow Umbrella’s AUM increased 38.5% to 27.7 trillion won with exposure to alternative assets increased from 19.1% to 26.5% as of the end of 2023. The mutual aid association posted a five-year high 5.34% return in 2023.

Meanwhile, Korea’s Military Mutual Aid Association (MMAA) in May shortlisted the three final candidates for CIO – current CIO Lee Sang-hee, Woori Financial Group former President Park Hwa-jae and KB Insurance Co. former CIO Han Seung-chul.

Police Mutual Aid Association’s CIO position has been vacant since former head Han Jong-seok’s term ended last October.

Write to Byeong-Hwa Ryu at hwahwa@hankyung.com
Jihyun Kim edited this article.