[Exclusive] NPS Per-Manager Alternative Investment Reaches 2.6 Trillion Won [Staff Shortage at NPS] ①

Tenth Year Since Fund Management Headquarters Relocation to Jeonju
Alternative Investments Quadruple in Size
Number of Fund Managers Grows by Only 1.6 Times
Per-Manager Portfolio Size Four Times Larger Than Canadian Pension

The National Pension Service (NPS) Fund Management Center, which manages 1,866 trillion won of public retirement assets, has now been based in Jeonju, North Jeolla Province, for a decade. During this period, the scale of alternative investments has continued to grow, but the number of fund managers has not increased significantly. As a result, the amount of alternative assets managed by each fund manager has become excessive, with the human infrastructure failing to keep pace with the growth in assets.

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According to materials received by Representative Han Jia of the People Power Party, a member of the National Assembly’s Health and Welfare Committee, from the NPS Fund Management Center on September 28, the size of alternative investments (private equity and venture capital, real estate, and infrastructure investments) as of June this year stands at 256.5 trillion won. This is approximately four times higher than in 2017, when the center moved from Seoul to Jeonju. The scale of alternative investment assets under management, which was 66.8 trillion won at the end of 2017, surpassed 100 trillion won (117.5 trillion won) in 2021, and, three years later, exceeded the 200 trillion won mark (202.9 trillion won in 2024). The fastest growth was seen in private equity and venture capital, which increased fivefold from 22 trillion won to 111.6 trillion won over the same period. Real estate and infrastructure investments increased threefold and 3.5 times, respectively.

In contrast, the number of fund managers overseeing alternative investments did not rise as much. The number of fund managers in departments responsible for alternative investments grew from 61 in 2017 to 98 as of August this year—an increase of 1.6 times. From 2017 to 2022, the average number of alternative investment managers remained at 63, but rose to 83 in 2023 and reached 100 last year.

Because the growth in assets under management far outpaced the increase in staff, the scale of assets each manager is responsible for also surged. Dividing the size of alternative investments by the number of alternative investment managers shows that the per-manager amount rose from 1.0951 trillion won in 2017 to over 2 trillion won (2.1279 trillion won) in 2022. By August this year, this figure had increased to 2.6173 trillion won, exceeding the 2.5 trillion won mark. Except in 2020 and 2023, the per-manager ratio grew steadily over the period. By division, the Private Equity and Venture Capital Office saw the sharpest rise—1.9-fold. The Infrastructure Investment Office and Real Estate Investment Office followed at 1.88 times and 1.48 times, respectively.

Compared to overseas pension funds of similar scale managing alternative investments, the NPS’s per-manager alternative investment responsibility remains relatively high. The Canada Pension Plan Investment Board (CPPIB) manages 365 trillion won in alternative investments; in addition, APG, which manages the Netherlands' ABP pension fund, oversees about 230 trillion won, and the California Public Employees’ Retirement System (CalPERS) in the United States manages 259 trillion won. When broken down per manager, CPPIB managers are responsible for 623.6 billion won, APG for 1.095 trillion won, and CalPERS for 2.9104 trillion won.

The Ministry of Health and Welfare has acknowledged this situation and announced improvement measures in 2023, but progress remains insufficient. At the time, the ministry’s “Plan to Improve Fund Management Infrastructure to Enhance NPS Fund Return Rates” pointed out that, with the per-manager asset scale at around 2 trillion won, there is a shortage of fund managers compared to countries like Canada and the Netherlands.

Representative Han emphasized, “As the National Pension Service grows into one of the world’s top three pension funds and diversifies its investment targets, it is essential to strengthen the ranks of professional personnel who can manage these assets stably. Especially as the scale of alternative investments rapidly expands, a shortage of fund managers can lead not only to excessive individual workloads but also to risks in overall fund management. Accordingly, the NPS must secure human resources commensurate with its fund scale and investment strategy.”

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