[Institution Perspective] Saemaeul Geumgo 'Resumes Investment'... Conservative Investment Focused on Bonds

Saemaeul Geumgo Investment Strategy Overhaul... Focus on Traditional Assets like Bonds and Stocks
Reducing Alternative Investments and Conducting External Research to Establish Investment Strategy

SaeMaeul Geumgo Central Association, which had temporarily suspended investments due to fund management corruption issues and poor real estate investments, is resuming investments after reorganizing its strategy. Considering the internal and external investment environment, it plans to pursue a conservative investment strategy focused on bonds and loans. External research services are also underway to establish an efficient asset investment strategy.

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Conservative Investment Focused on Bonds and Loans... Sorting Out Existing Project Financing (PF) and Others

Yoon Ji-seon, Head of Fund Management and Chief Investment Officer (CIO) of SaeMaeul Geumgo Central Association, who began her term on March 15, said, "We are currently focusing on bonds and reducing the proportion of alternatives, which is key," adding, "If the level becomes appropriate, we will also proceed with stock investments."

CIO Yoon earned a degree in asset management from the KDI School of Public Policy and Management, and worked at Donghwa Bank and Shinhan Bank before joining Korea Asset Management Corporation (KAMCO). She recently worked for 23 years at the Private School Teachers’ Pension, mainly handling asset management tasks. She has experience in the Investment Strategy Office, Domestic Bond Team, Alternative Investments, and Risk Legal Office. Her asset management career spans 26 years.

Last year, SaeMaeul Geumgo Central Association faced a critical period where establishing and implementing management innovation tasks was essential to address successive legal and misconduct issues. Additionally, with the top management resigning one after another, no new investments were possible. However, as the organizational restructuring plan and key personnel related to alternative investments were gradually filled, conditions for resuming investments have been created. With the placement of key personnel completed, full-scale investment resumption and risk management of existing investments are underway.

CIO Yoon noted, "This year, we expected monetary easing policies and interest rate cuts centered on the U.S., but the situation has stagnated more than anticipated," adding, "Due to the expectation that the timing of interest rate cuts will be delayed and the number of cuts reduced, interest rates have risen compared to the beginning of the year." He continued, "Overall, the investment environment regarding exchange rates and interest rates is challenging," and "We consider bond investments and private loans to be relatively favorable." He emphasized, "In a situation where interest rates are rising and refinancing is difficult, we will cut losses on existing investments such as PF where necessary, and modify conditions to salvage what can be saved."

Decisions Based on the 'Principle of Good Faith'... Asset Strategy Research Underway

Currently, SaeMaeul Geumgo Central Association is making every effort to manage PF risks across the organization. It plans to gradually reduce the proportion of alternative investments such as real estate over the next five years. As of the end of June last year, the scale of alternative investment assets of SaeMaeul Geumgo Central Association, which manages assets worth 100 trillion won, was about 30 trillion won.

Although the alternative investment ratio was planned to be raised to the mid-30% range, it was decided to lower the proportion in accordance with the direction of the supervisory authority. Additionally, the maximum investment in alternative investments cannot exceed 50% of the fund's raised amount, and investments in newly established management companies are handled under strict criteria.

CIO Yoon said, "We are conducting research services to adjust the proportion of alternative investments," adding, "Through this research, we will diagnose asset classes and make policy decisions." He further emphasized, "We are agents and trustees, so generating profits for those who entrusted us with their money is our top priority," and "We will make decisions based on the principle of good faith, fulfilling the duty of care as prudent managers."