By Cho Jae-hyon
Staff Reporter
National Pension Service (NPS) President Kim Ho-shik said that the fund has no plan to take over management control of Woori Financial Group or Korea Exchange Bank and its investment in banks will be made in portfolio investment.
``We are considering buying stakes in (Woori Financial or Korea Exchange Bank). But that's not for acquisition of management control,'' Kim said at a press briefing. ``Our investment in banks will be limited to portfolio investment.''
His remarks came in reaction to recent reports that the pension fund might seek to become the largest shareholder of Woori Financial Group and will influence management of the nationalized financial holding firm of Woori Bank.
The government holds about 73 percent stake in Woori Financial Group after a series of block sales to institutional investors.
Woori Financial Group has been positive about the national pension's investment in Woori Financial but is negative about the fund influencing management of the financial holding firm.
The government needs to dispose of its stake in Woori Financial to retrieve its public funds. It has difficulty in selling major stakes in the firm as it does not want foreign investors to become major shareholders, while there are few domestic institutions that can afford to cover the huge costs to become major shareholders of Woori.
In the mean time, the pension fund said that it will expand its investment in bonds and stocks overseas in coming years.
It will raise the percentage of overseas securities investment in its total funds to 20 percent by 2012, with the amount expected to reach about 400 trillion won.
It will hire foreign asset management firms to manage the funds investing in overseas securities.
It said it and Morgan Stanley Investment Management (MSIM) has signed a contract calling for Morgan Stanley to provide support and training to enhance the pension fund's overseas investment portfolio and in-house capabilities.
As a strategic partner, Morgan Stanley will manage certain NPS assets. The Partnership was ratified on July 17 at a ceremony at MSIM's offices in New York, attended by NPS president and Owen Thomas president of MSIM.
The largest pension fund in Asia outside of Japan, NPS has over $200 billion of assets under management.
"NPS is growing fast and we expect to be managing over $300 billion of assets by 2012," said Kim. "It is important that we enhance our investment skills and we are delighted to have access to the expertise and professionalism of Morgan Stanley.''
``Korea is an important market for Morgan Stanley Investment Management," said Thomas. "We are proud that NPS, one of the largest pension funds in the world, has chosen MSIM as a Strategic Partner and honored to be playing a key role in how Korea's pension assets are managed."