Alphabiz - Korea’s National Pension Fund Reports Over ₩6 Trillion Loss in Overseas Alternative Investments

Photo courtesy of Yonhap News

[Alpha Biz= Paul Lee] Seoul, October 9 — South Korea’s National Pension Service (NPS) posted losses exceeding ₩6.36 trillion (approx. US$4.6 billion) from overseas alternative investments — including commercial real estate and infrastructure assets — during the first half of 2024, according to data disclosed to the National Assembly.


Rep. Seo Young-seok of the Democratic Party, a member of the parliamentary Health and Welfare Committee, revealed that NPS’s alternative investment loss breakdown was as follows:


Private alternative investments: ₩2.38 trillion

Real estate: ₩1.68 trillion

Infrastructure: ₩1.94 trillion


Overseas alternative assets accounted for 14.4% of NPS’s total portfolio as of June 2024, more than double the 6.3% share in 2015, underscoring the fund’s continued push toward diversification.


If the losses persist through year-end, it would mark the first annual overseas alternative investment loss since 2020, when the fund reported a ₩307.5 billion deficit in the category. NPS recorded gains in the subsequent three years (2021–2023).


Industry analysts attribute the setback to declining valuations of global commercial real estate and infrastructure assets as funds invested during the pandemic approach maturity. The prolonged remote-work trend has weakened office demand and rental income, while asset values in the U.S. and Europe are estimated to have fallen by around 25% on average.


In addition, currency fluctuations, higher interest rates, and rising financing costs have further eroded returns. Recent talent outflows from NPS’s alternative investment division have also raised concerns about future portfolio management stability.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)