Korea's pension fund to step up asset outsourcing next year

SEOUL, Dec. 17 (Yonhap) -- South Korea's pension fund said Thursday that it will
slightly increase its asset management outsourcing next year in a bid to boost
returns.

The country's biggest institutional investor plans to raise the portion of its
financial assets for outsourcing to external fund managers to 23.2 percent, or
70.3 trillion won (US$59.7 billion) from its target of 23 percent for 2009, the
National Pension Service (NPS) said in a statement.
"The NPS is seeking greater fund management outsourcing in an effort to raise
profits through the expertise of fund managers as well as diversifying investment
decisions," the pension fund said.
According to the 2010 plan for management outsourcing, the NPS will seek to
entrust up to 6 percent of its local bond investments to outside fund managers
next year, up from 5.5 percent for 2009, while setting aside 40 percent of
foreign debt investments for outsourcing, higher than the 38.5 percent this year.

Management outsourcing for domestic stocks, however, will be lowered to 50
percent from 55 percent, while 90 percent of overseas stock investments will be
entrusted to outsourced managers, down from the current 100 percent.
The NPS reduced its outsourcing target for overseas shares because it plans to
start making direct investments in foreign equity markets, it said.
The fund estimated that its investment in local stocks would reach 50.3 trillion
won by the end of next year, with its holdings in domestic bonds reaching 205.4
trillion won.
pbr@yna.co.kr
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