At the end of last year, Seowon Joo, the Chief Investment Officer (CIO) of the National Pension Service, successfully secured a one-year renewal of her term, which ended after two years. The investment direction of the National Pension, summarized as 'overseas alternative investment,' is expected to gain momentum this year. Among the fund management headquarters employees, there are rumors that CIO Seowon will soon make high-level personnel changes.
According to the government and the financial investment industry on the 12th, Kim Tae-hyun, chairman of the National Pension Service, is expected to soon announce the reappointment of CIO Seowon. The reappointment of the National Pension CIO is finalized after approval from the Ministry of Health and Welfare and the chairman of the National Pension Service. It is not a resolution from the fund's board of directors or the asset management committee. It is reported that CIO Seowon is currently coordinating the details of her contract regarding the reappointment with the service.
CIO Seowon's term, which began at the end of 2022, was originally set to run until December 26 of last year. The term for the National Pension CIO is a basic two years and can be renewed annually based on performance. Since CIO Seowon achieved double-digit revenue rates during her tenure, her reappointment has been considered a foregone conclusion. However, an unexpected martial law situation in early December of last year delayed the announcement until now. The new term completion date is December 26 of this year, one year after the expiration of her previous term.
With the uncertainty of reappointment removed, Deputy Minister Seowon is expected to intensify efforts toward overseas investments and alternative investment strategies, which are the direction of the National Pension's investment strategy. Recently, CIO Seowon reportedly expressed her intention to continuously check the status of existing domestic and international asset management and actively pursue new investment opportunities.
Last month, CIO Seowon returned from a business trip to Australia with key executives in the alternative investment sector, including An Jun-sang, director of real estate investment, and Kim Sang-tae, head of the Asia Infrastructure Investment Team. CIO Seowon met with Australia's largest private equity fund, PEP, and global asset management company Macquarie, as well as the large Australian pension fund, Aware Super, visiting cities like Sydney and Melbourne.
CIO Seowon also checked the operational status of existing Australian investment assets, including the Port of Melbourne, Melbourne Quarter Tower (MQT), and Aurora Place Building in Sydney. The National Pension Service acquired a 50-year operating right to the Port of Melbourne in 2016 for 9.7 billion Australian dollars (approximately 8.87 trillion won) in conjunction with Australian and Chinese sovereign wealth funds. MQT is a 34-story building located in Melbourne's central business district. Aurora Place in Sydney is a commercial and residential complex located on Phillip Street.
Within the fund management headquarters, there is a prediction that CIO Seowon, with her reappointment confirmed, will undertake personnel changes this month for asset managers. In particular, there are rumors of possible changes in the two pillars of the National Pension's alternative investment sector, the Real Estate Investment Office and the Infrastructure Investment Office. One asset manager at the National Pension Service mentioned, "There are rumors that high-level executive personnel changes will take place, and there are also whispers that a specific person's appointment was rejected by the Ministry of Welfare," adding that "the situation is chaotic ahead of the appointments."
The National Pension Service has targeted 'overseas niche and non-core real estate' as a weapon to delay the depletion of its fund, and there are expectations that CIO Seowon's appointment would be related to this. Areas falling under niche and non-core real estate include data centers, warehousing services, dormitories, nursing facilities, single-family homes, life sciences research facilities, forests, and hospitals and healthcare facilities. Recently, the National Pension Service invested approximately 2.3 trillion won in niche real estate markets in the United States, the United Kingdom, and Australia.
The National Pension Service's fund management headquarters recorded an annual management revenue rate of minus (-) 8.22% in 2022, just before CIO Seowon's appointment, marking the worst rate since the introduction of the National Pension system in 1988. However, in her first year, the performance significantly improved. In 2023, the revenue rate for the National Pension Service's fund management headquarters was 13.6%. Revenue also surpassed 100 trillion won, setting a new record high. By the end of November 2024, a cumulative revenue rate of 12.57% has been recorded, with fund reserves amounting to 1,185 trillion 5,211 won.