As stocks and bonds remain vulnerable to gyrations in global markets, one of South Korea’s major pension funds is betting big on alternative assets to boost returns.
Government Employees Pension Service, with about $6 billion in assets, plans to raise its investments in the category, that includes private credit and real estate loans, to 34% in the next four years from about 28% aimed for this year, Chief Investment Officer Baek Joohyun said in an interview.
The fund’s outstanding positions in private debt stood at 447.1 billion won as of July, and is planning to invest $70 million in overseas real estate loans, which would mark its entry into the global property market. GEPS expects a return of 7-8% from real estate in developed countries, Baek said. The fund reduced its stock exposure to Europe on inflation risks, while increasing to the US on solid corporate earnings and expectations that its economy will have a soft landing
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