Читать книгу The Hunt for Unicorns - Winston Ma - Страница 38

In a country with a total equity market capitalization of $1.9 trillion (2018), South Korea's nearly $600 billion national pension fund has announced its intention to rebalance its portfolio from about 45% domestic fixed income and 18% domestic equities to 30% and 15%, respectively, while raising overseas equities from 20% to 30%.

Asset managers of the fund – which reports to the cabinet and South Korean parliament – will now have to deal increasingly with the politically charged determination of which Japanese issuers may have engaged in war crimes during the Japanese occupation of Korea. In the face of proposed South Korean legislation that would ban South Korean pension funds from investing in “war crime companies,” the sovereign pension fund has announced a review of its portfolio of more than $1 billion in Japanese equities, the Financial Times has reported.

Of course, cross-border activity is not without baggage. In South Korea, the National Pension Service (NPS) has grown so large that the local markets are simply not deep and wide enough to absorb its moves. When expanding its overseas portfolio, however, the pension fund has faced difficult investment choices due to rising political tensions with Japan (see Box: Politics, Ethics, and International Diversification). In extreme cases, sovereign investors may turn into rogue traders themselves like those in the urban legends of the Wall Street (see Box: 1MDB the Outlier).