South Korea pension fund to support corporate reform efforts

SOUTH Korea’s public pension fund said on Wednesday (Feb 21) it would invest in locally-listed companies that are working to boost their value.

The National Pension Service (NPS), the world’s third-largest public pension fund, is in the process of selecting three domestic fund managers to outsource its investments and will finalise the decision by March, it said in a statement.

The NPS said the investment size and timing of the fund allocation were to be determined based on portfolio management and financial market conditions.

South Korea plans to announce on Feb 26 a policy package dubbed “Corporate Value-up Programme”, including tax incentives, to boost the value of Seoul-listed companies by encouraging them to return more capital to shareholders and improve governance.

Analysts see the state-run pension fund, with its major stakes in large companies, playing a key role in South Korea’s efforts to boost their valuations over the medium to long term.

The NPS held 999.2 trillion won (S$1 billion) in financial assets as of the end of November. It held 141.1 trillion won in domestic stocks, 51 per cent of which were through outsourced investments. REUTERS