Lee Gyu-hong Named New CIO of NPS, the ‘1,900 Trillion-Won Capital Markets President’ [fnMarketWatch]

[Financial News] Lee Gyu-hong, former CIO of the Teachers' Pension, has been selected as the new investment chief overseeing the public’s retirement assets, which are approaching 1,900 trillion won. The NPS CIO, who leads the largest institutional investor in South Korea’s capital markets, is known in the investment industry as the ‘president of the capital markets.’
According to the financial investment industry on the 14th, the National Pension Service appointed Lee Gyu-hong, former CIO of the Teachers' Pension, as its new head of the Fund Management Headquarters. His term is two years, with the possibility of one-year extensions based on his performance.
The appointment has drawn attention because it comes as the NPS fund has grown to around 1,900 trillion won, making asset allocation and risk management more important than ever for the global mega-sized pension fund.
The final selection was particularly notable as a four-way race among former CIOs of pension and mutual-aid funds. Lee competed until the final stage on the shortlist with Park Cheon-seok, former head of the fund management division at the Korean Federation of Community Credit Cooperatives; Lee Do-yun, former head of asset management at the Yellow Umbrella Mutual Aid Fund; and Kim Ho-jin, former head of fund management at the National Federation of Fisheries Cooperatives.
Unlike previous NPS CIO selections, in which the final candidate pool was typically narrowed to two or three people, four candidates advanced to the personnel screening stage this time. The industry viewed this as unusual. Ultimately, the NPS chose Lee, who has experience in both private asset management and public-pension management.
Born in 1966, the new CIO built his investment career at Samsung Asset Management, DB Asset Management and Eastspring Asset Management. He later served as CIO of NH-Amundi Asset Management and chief executive of Ascendas Asset Management before becoming CIO of the Teachers' Pension.
Lee is regarded as a multi-asset investment expert with experience ranging from traditional assets to alternative investments. In particular, his tenure as CIO of the Teachers' Pension is considered a strength because he led medium- and long-term asset allocation as well as overseas and alternative investments, combining the market expertise of private asset managers with the long-term asset-allocation experience characteristic of pension funds.
Investment banking industry officials cite the development of a global asset-allocation strategy suited to the rapidly expanding fund as Lee’s first major test. Given the NPS’s influence on the domestic market, expanding overseas investments, restructuring its alternative-investment portfolio and managing risks arising from currency and interest-rate fluctuations will also be key challenges.
The NPS CIO is not responsible merely for investment returns. The position influences capital flows across global investment markets, including domestic stocks and bonds, overseas stocks and bonds, private equity funds (PEFs), real estate and infrastructure. This is why the NPS’s selection of external managers and changes in asset allocation can reshape the domestic asset-management and investment-banking markets.
A senior official in the investment banking industry said, "As the fund grows, the ability to coordinate the overall portfolio becomes more important than the performance of any particular asset class. The industry’s greatest interest will be how the new head, who has experience as both a private-sector asset manager and a public-pension CIO, restructures the 1,900-trillion-won portfolio."
Meanwhile, the NPS appointed Kim Dae-sun as its new Director of Welfare. Kim, an internal candidate, joined the NPS in 1999 and went on to serve as head of strategic management, head of the Future Innovation Planning Group and head of the Information Technology Division.
[email protected] Kim Kyung-a Reporter