South Korea‘s public pension scheme, the National Pension Service, pledged Wednesday to add resilience to its capital deployment to overseas assets through a structural reorganization.

Through the reshuffle, the NPS Investment Management will split its global public market division in two -- with one part dedicated to investing in foreign stocks and another in foreign fixed-income products.

The move will allow the NPSIM to increase the in-house investment of foreign listed stocks and its exposure to corporate credits, and at the same time lay the foundation for a more flexible investment strategy of both asset classes, the NPS said in a statement.

“The reshuffle will allow NPS to strengthen its prowess not only in foreign alternative investment but also in foreign equities investment, gaining foothold as the pension fund on the global stage,” said Kim Yong-jin, chairman of the public pension fund that oversees more than 770 trillion won ($703 billion) of financial assets.

NPS added that NPSIM's risk management team for alternative investments will also be split into two, one dealing with private equities and the other handling real assets.

The changes are part of its five-year plan to strengthen overseas investment capability unveiled in August 2020. As of October, over 36 percent of NPS’ financial assets are deployed to foreign assets.

By 2024, NPS projects its assets under management to exceed 1,000 trillion won, with its overseas exposure surpassing 500 trillion won. Meanwhile, NPS expects its revenue -- mostly from contributions of Korean nationals -- to be dwarfed by its expenses starting from 2030, as the working-age population in the country is on the decline.

By Son Ji-hyoung (consnow@heraldcorp.com)