Korea’s National Pension Service (NPS) runs the country’s National Pension Fund, with assets managed through its investment arm NPS Investment Management (NPSIM). Since NPSIM was launched 24 years ago, assets have risen 22-fold to €718bn. As the fund grows in size, allocations to overseas assets and alternatives (including real estate) are constantly being increased to overcome the limitations of small domestic markets and to secure long-term financial stability.

On 1 January 2024, two newly-created teams started operating: a real estate platform investment team to explore new investment sources from listed real estates and platforms, and an overseas investment planning team to conduct integrated planning on overseas strategies. Later this year, a new office will be opened in San Francisco to make it easier to source deals and to expand quality co-investments.

NPS has actively saved costs incurred from alternative investments. In spite of fierce market competition, NPS formed strategic partnerships with global leading asset managers, such as Goldman Sachs, to cut down expenses through co-investing. Last year, NPS saved €57.8m in management fees.

In 2023, the NPS real estate team focused more on REITs programmes delivering higher NAV discounts than those of real assets. To diversify the portfolio, it collaborated with FTSE Russell in developing a new index, the FTSE EPRA Nareit Developed Extended Opportunities RIC 6/45 Capped Index. This has 70 constituents across ten countries, including Australia, Singapore, the US and the UK. It was designed to complement existing portfolios by tapping into niche and non-core sectors benefiting from technological and demographic change. The index includes a mobile telephone tower, and senior care and single-family homes. NPS committed KRW1trn (€684.2bn) to REITs using the index, earning a 7.4% return.