UPDATE 1-S.Korea fund may treble foreign stocks to $21 bln

jueves 20 de marzo de 2008 05:38 CET

(Adds details, background)

SEOUL, March 20 (Reuters) - The world's fifth-biggest pension fund, South Korea's National Pension Service (NPS), may treble its investments in foreign stocks to nearly $21 billion this year, including buying more chunks of Wall Street banks.

Earlier this month, the NPS said it would invest $300 million in U.S. private equity fund TPG's [TPG.UL] $7 billion fund-raising, joining sovereign wealth funds buying into the U.S. subprime mortgage-hit investment banking sector.

Sovereign wealth fund Korea Investment Corp said in January it was buying $2 billion worth of preferred shares in Merrill Lynch MER.N.

Kim Ho-shik, president of NPS, whose assets look set to double to 415 trillion won ($411 billion) by 2012, said the fund was "carefully considering" adding to its holdings in the U.S. investment banking sector.

"We have a lot of interest in M&As," he told a news briefing, "The financial sector is very promising in the long run."

NPS aims to increase investments in corporate M&A and diversify into overseas assets, prompted by an ageing South Korean population that could face a pension shortfall in coming decades.

Kim said stocks currently represent 13.55 percent of the fund's investment portfolio, a figure the NPS aimed to increase to 17 percent, or potentially 22 percent, by the year-end.

The NPS currently holds around 7 trillion won in foreign shares.   Continuación...