[Institutional Investment Strategy] ③ Gongmuwon Pension, Bear Market as Opportunity... Expanding Global Venture Investment

Concerns about an economic recession are growing due to high interest rates, high exchange rates, and high inflation, deepening investors' worries. Although the stagnant global stock market seemed to rebound briefly, there are fears that a bigger crisis may be approaching. In an uncertain market environment, it is not easy to decide the direction by looking at the investment compass alone. Asia Economy listens to the investment strategies of 'big players,' institutional investors who move the market with decades of experience managing large-scale funds, know-how, and strict investment principles. We will preview the investment directions of institutions through this fall and winter into early next year, helping Asia Economy readers fine-tune their investment steering.

[Asia Economy Reporter Park So-yeon] The Government Employees Pension Service (GEPS), managing financial assets worth about 8 trillion won, views alternative investments as risk management and traditional assets such as bonds and stocks as rebalancing opportunities.

According to the investment banking (IB) industry on the 25th, as of the end of 2021, GEPS manages financial assets totaling 8.1055 trillion won. These consist of bonds worth 2.9032 trillion won (35.8%), stocks worth 2.3213 trillion won (28.6%), alternative investments worth 2.0911 trillion won (25.8%), and payment reserves for short-term expenditures such as pension benefits amounting to 790 billion won (9.75%).

According to the mid- to long-term asset allocation strategy, the proportion of traditional assets such as stocks and bonds should be reduced, and the proportion of alternative investments should be increased. However, the short-term tactics to respond to the current market situation are somewhat different. The GEPS fund management team follows the long-term trend of reducing traditional assets but assesses that the lower prices of traditional assets like bonds and stocks can present rebalancing opportunities for long-term investors.

In the alternative investment sector, a slight adjustment and endurance strategy is expected. While calculating available funds, some distressed assets will be partially disposed of, but for most alternative investment assets, the plan is to observe the situation rather than make immediate adjustments. Overall, since the composition of alternative investment assets is sound, the plan is to steadily increase them over the mid- to long-term while managing risks.

Additionally, the venture investment sector, which has delivered performance so far, is expected to actively expand its investment scope. GEPS has increased returns through venture investments via fund managers. Going forward, it is reportedly considering entrusting funds to overseas regions, especially the U.S. Silicon Valley, where many promising growth companies exist and institutional investors have shown excellent results. Last year, GEPS selected IMM Investment, SV Investment, and Aju IB Investment as VC delegated fund managers and invested a total of 45 billion won, 15 billion won each. A similar scale of VC investment is expected to proceed this year as well.

This content was produced with the assistance of AI translation services.