Korea’s National Pension Service (NPS) has added a new selection criterion for external managers of its domestic equity and bond mandates, awarding a bonus point to asset managers with operations in Jeonju, where the pension giant’s headquarters is located.
The NPS announced the so-called “client communication” assessment criterion in a statement posted on its website on June 19.
The bonus point is separate from the main quantitative and qualitative evaluation score of 100 points.
Asset owners such as pension funds typically set criteria such as minimum assets managed, track record and staffing levels when they put investment mandates up for tender.
The addition of “client communication” to the list suggests that the NPS is placing emphasis on ease of communication of having external managers who are located near its headquarters. This means that if an asset management firm in Seoul, the capital of South Korea, and a rival in the city of Jeonju put in equally strong bids, the one in Jeonju will likely have the edge.
Jeonju is located in North Jeolla Province, roughly 200 kilometres south of Seoul.
The NPS is the world’s third largest pension fund, with around 1,610 trillion won (US$1.08 trillion) of assets.
