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South Korean pension scheme to boost British infrastructure

27 March 2012

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The government is expecting a boost for British infrastructure projects after the South Korean National Pension Service (NPS) has announced it is to set up office in the UK's capital.

According to reports by the UKPA the move was announced directly after a meeting between the scheme's chairman, Jun Kwang-woo, and Deputy Prime Minister Nick Clegg, who is currently in Seoul.

The fund, which holds over $320bn in investments, is ranked as one of the largest in the world according to data held by Pension Funds Online. It stated it wants to almost double its overseas portfolio to $36bn and that the new office in London will be opened in June.

NPS has already invested more than £1bn in the UK over the past two years including in projects such as Gatwick Airport and HSBC's London headquarters.

On its website the scheme writes: "Overseas investment seeks to enhance the portfolio diversification effect by achieving either higher returns at the same level of risk or the same rate of return at a lower level of risk.

"An increase in overseas investment is expected to help minimize a possible negative impact on the local capital market when NPS needs to liquidate a significant amount of securities for pension payments at a time. Overseas investment is also intended to enhance investment skill over the long term by strengthening relationships with the world-renowned investment managers."

Mr Clegg reportedly welcomed the move saying: "This is fantastic news which has the potential to bring considerable investment to the UK and create a significant jobs boost back home.

"Investment in infrastructure is a virtuous circle, growing our manufacturing and construction sectors and making Britain more attractive for further investment.

"We're ramping up our sales pitch abroad - Britain is open for business. We're making sure the UK doesn't miss out because investors don't know what's on offer or about our long-term strategy to deliver world-beating infrastructure. NPS's decision to open in London is testament to the economic opportunities in the UK."

The move comes after Clegg announced a free trade agreement between the EU and South Korea on Sunday, saying it could add £500m per year to the UK economy and additional export opportunities worth £2bn for UK businesses.

 

First published 27.03.2012

azeevalkink@wilmington.co.uk