Korean investment in UK infrastructure is set to receive a massive boost today as the world’s fourth largest pension fund reveals its plans to open a UK base. The new London office of the South Korean National Pension Service (NPS), which will open in June, will play a key role as the fund expands its overseas investment. Deputy Prime Minister Nick Clegg announced the move today following a meeting in Seoul with the Chair of NPS, Jun Kwang-woo.
NPS has $320 billion under management and has ambitions to almost double its current overseas portfolio of $36 billion. The London site will be only the second overseas base after New York. It represents a huge opportunity for significant investment in UK real estate, infrastructure projects and equities.
NPS has already shown its confidence in the UK economy by investing over £1bn in the last two years. It has bought stakes in Gatwick Airport (a 12 per cent stake representing £100 million), and 40 Grosvenor Place (a 50 per cent stake worth £85m) as well as the purchase of the HSBC headquarters in Canary Wharf (£773 million) and 88 Wood Street (£183m).
Following his meeting with the Chair of the NPS in Seoul, at which the move was confirmed, Deputy Prime Minister, Nick Clegg, said:
This is fantastic news which has the potential to bring considerable investment to the UK and create a significant jobs boost back home.
Investment in infrastructure is a virtuous circle, growing our manufacturing and construction sectors and making Britain more attractive for further investment.
We’re ramping up our sales pitch abroad - Britain is open for business. We’re making sure the UK doesn’t miss out because investors don’t know what’s on offer or about our long-term strategy to deliver world-beating infrastructure. NPS’s decision to open in London is testament to the economic opportunities in the UK.
Last September the Deputy Prime Minister announced work to ensure that the 40 of the UK’s biggest infrastructure projects would be given special priority status.
Each project is being rigorously examined by Ministers to make sure there are no delays or blockages and that the economy feels the benefits as quickly as possible.
NPS is the fourth largest pension fund in the world in terms of assets under management and is on track to become world’s third largest in the near future.
The fund has been an active buyer of Western properties, purchasing a number of landmark buildings in Europe and the US, including:
- 75 per cent stake worth €278 million in a Paris shopping centre
- a $1 billion deal to buy a 23.44 per cent stake in Colonial Pipeline
It has also set up a $4 billion partnership programme with 10 large Korean companies including Samsung C&T, KT Corp, KT&G, and Posco, to tap into overseas investment opportunities.
Notes to editors
Deputy Prime Minister Nick Clegg announced that 40 of the UK’s biggest infrastructure projects were to be given priority status in a speech to the London School of Economics on14 September 2011. A check against delivery copy of the text can be found here.