Pension Funds and Mutual Aid Associations Rapidly Appointing "Guardians of the Capital Market" CIOs

Public Officials Benefit Association to Select CIO After General Assembly on the 22nd
Government Employees Pension Service and Police Mutual Aid Association Also Begin Selection Process

The appointment of Chief Investment Officers (CIOs) for pension funds and mutual aid associations, often referred to as the "guardians of the capital market," is proceeding in succession. Due to somewhat uncertain domestic and international political situations, as well as the selection processes, it is expected that conservative, stability-focused investment activities will continue for the time being this year.

According to the investment banking (IB) industry on April 22, the Public Officials Benefit Association plans to hold a general assembly that afternoon to select a new CIO (Executive Director of Business). Heo Jang, the former CIO whose term ended in February, and Lee Doyoon, former CIO of the Yellow Umbrella Mutual Aid Fund, have been named as the final candidates. The candidate who receives approval from at least two-thirds (37 members) of the 55 delegates in the vote will be selected. Even if one wins the vote, if they do not secure 37 votes, a new vote will be held to determine whether they can obtain 37 votes. The candidate who passes all procedures will be officially appointed after approval from the Ministry of the Interior and Safety.

There is a strong atmosphere favoring the reappointment of the current CIO, Heo. Since taking office in February 2022, he has maintained a return rate in the 4-5% range even during periods of high volatility, such as the COVID-19 pandemic. In 2022, when the National Pension Service suffered losses of over 8%, he achieved a return of 3.8%. An industry insider explained, "Given that the final candidates all have excellent backgrounds, there is a strong sentiment that Heo's reappointment is likely for the sake of stability. Heo's track record in fund management and his outstanding presentation skills are also factors that could earn him high marks from the delegates."

The process to select a CIO for the Government Employees Pension Service is expected to begin next month. The current CIO, Baek Juhyun, will serve until July 3. Accordingly, the Government Employees Pension Service is expected to announce the position and begin the selection process next month. Born in 1970, Baek was appointed in 2022 as the youngest head of fund management in the industry. Although he has consistently delivered solid results since then, the fact that no CIO of the Government Employees Pension Service has served more than three years remains a variable.

The appointment of the Head of Investment Management, who serves as CIO at Korea Investment Corporation (KIC), which invests exclusively in overseas assets, is also expected to take place as early as late next month. With uncertainties such as a possible change of administration in Korea and U.S. tariff policies abroad, the focus is expected to be on organizational stability.

The Police Mutual Aid Association, which has had a vacant CIO position for about 18 months since October 2023, is also expected to begin its selection process soon. On April 1, Lee Youngsang, a former commissioner of the Incheon Metropolitan Police Agency and a former police officer, was appointed as chairman, a position that had been vacant for about 20 months. The selection of a CIO, who will manage 5 trillion won in assets, is expected to accelerate. For the first time since its founding, there is a possibility that a CIO from the internal investment office could be appointed. From 1989 to 2015, the CIO position at the Police Mutual Aid Association was held by former police executives. After controversies over expertise arose, the association began hiring externally. However, as several CIO terms expire this year and more candidates become available in the market, there is also a significant possibility that an external candidate could again be appointed as CIO.

Heo Jang, Chief Investment Officer (CIO) of the Public Officials Benefit Association, is explaining asset management strategies at the 'POBA Money Show' held on the 3rd at Seoul Dragon City in Yongsan-gu, Seoul.