Korea’s NPS to form separate secondaries team

National Pension Service of Korea plans to form separate teams for debt and secondaries amid rising appetite for the former.

The 916 trillion-won ($661.4 billion; €661.3 billion) institution had wanted the two units to operate independently in 2020 and scrapped these plans last year due to “market conditions”, Jeryang Lee, head of the strategic alternative investments team at NPS, told delegates at the Private Debt Investor: Seoul Forum on Tuesday. The two were instead integrated into the newly formed alternative investment strategy department, which also covers GP stakes investing.

NPS will revive its plans to separate the two strategies next year, Lee said.

“That may be subject to further discussions, but at the moment that is the plan,” he added. “The reason why we wanted [private debt] to be an independent team on its own is so that we can grow the portfolio of PD assets. And given the economic situation… it’s making PD investments overall more attractive.”

Alternatives accounted for 6.3 percent of the overall NPS portfolio as of 30 June, per its website. The institution held 56 trillion won of private equity, debt and hedge fund assets, of which 73.5 percent was invested overseas. It has committed to the likes of GSO European Senior Debt Fund II, AMP Capital Infrastructure Debt Fund V and Blackstone Real Estate Debt Strategies IV, according to affiliate title Private Debt Investor‘s data.

NPS has committed to secondaries funds including those managed by Ardian, Stafford Capital Partners, Strategic Partners and Lexington Partners, according to Secondaries Investor data.