KB Securities Selected as Weekly Manager for Alternative Investments of Disability Employment and Wage Bond Guarantee Fund

Full-Scale Entry into Pension Fund Outsourced Management Business

[Asia Economy Reporter Minwoo Lee] KB Securities will serve as the primary manager for alternative investments of the 'Fund for the Promotion of Employment of Persons with Disabilities and Vocational Rehabilitation' and the 'Wage Claim Guarantee Fund.' The company plans to make a full-scale entry into the external entrusted pension fund management (OCIO) market in the future.

On the 7th, KB Securities announced that it signed the main contract with the Ministry of Employment and Labor to become the primary manager for the 'Fund for the Promotion of Employment of Persons with Disabilities and Vocational Rehabilitation' and the 'Wage Claim Guarantee Fund.'

The Fund for the Promotion of Employment of Persons with Disabilities and Vocational Rehabilitation is established to promote employment incentives for persons with disabilities, support employment, and advance vocational rehabilitation projects. The Wage Claim Guarantee Fund is created to provide substitute payments of wages, suspension allowances, and severance pay to workers who have retired due to corporate insolvency.

Starting this month, KB Securities will be responsible for managing alternative investment assets and post-management tasks for the two funds as the primary manager for alternative investments over the next four years. Specifically, reflecting the requirements of the disability employment and wage claim funds, KB Securities will handle investment, performance management, and risk management of domestic and international alternative investment asset classes, including real estate, infrastructure, and private equity funds (PEF).

Earlier in July, the Ministry of Employment and Labor's asset management team announced the selection of the primary manager for alternative investments of the two funds. Six securities firms and asset management companies participated in the first quantitative and qualitative evaluations. As a result of the evaluation, KB Securities was designated as the preferred negotiation partner in August and secured the status of primary manager for alternative investments by signing the main contract on the 29th of last month.

This move demonstrates an active entry into the pension fund OCIO market. KB Securities established the OCIO Solutions Department within its institutional sales division this year. As the OCIO market grows, there was a need for an organization dedicated to deriving and managing solutions for public funds and large pension funds. The recruitment of Kim Seonghee, Executive Director in charge of OCIO Solutions at KB Securities, in May aligns with this strategy. Director Kim is an OCIO expert who has been involved since the introduction of the pension investment pool system, considered the origin of OCIO, in 2001 and has managed large public funds such as the Industrial Accident Compensation Insurance Fund.

Director Kim stated, "We will focus on consolidating the diverse businesses and capabilities of the securities firm to deliver solutions that customers want," adding, "We will do our best to fulfill a greater role and responsibility in the expanding OCIO market, including the upcoming 2022 re-selection of the Housing and Urban Fund and the 2023 re-selection of the Employment and Industrial Accident Insurance Fund as primary managers."

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