It was determined that while the National Pension Service halted new capital commitments to Aegis Asset Management during a period when relations between the two parties deteriorated, including attempts by the National Pension Service Corporation's Real Estate Investment Division to replace Aegis Asset Management, its exposure (risk exposure amount) increased. As of the end of last year, the investment balance stood in the 2.3 trillion won range, an increase of 8.5% over one year, a result of executing existing capital commitment agreements. With the head of the Real Estate Investment Division, who led attempts to replace Aegis Asset Management, recently dismissed, the industry is watching whether new capital commitments to Aegis Asset Management, the country's largest real estate manager, will resume.
According to pension funds and investment banking (IB) industry sources on the 5th, the National Pension Service increased its investment balance in the Magok One Grove fund to 800 billion won as of the end of last year, up 424.1 billion won from the previous year. Magok One Grove is a real estate project managed by Aegis Asset Management. In 2021, the National Pension Service contracted to pre-purchase One Grove for 2.3 trillion won through Aegis Asset Management's Aegis Specialized Investment Private Real Estate Investment Trust No. 416. Aegis Asset Management acquired One Grove in February last year from the developer, Magok CP4 PFV (Project Finance Vehicle; IRDV 45.2%, Taeyoung Construction 29.9%, Aegis Asset Management 19.9%, Meritz Securities 5%).
The investment balance is the book value calculated by subtracting recovered funds and loss provisions from the capital invested. It does not include bank collateral loans or other financing, representing only the funds directly executed by the National Pension Service into Aegis's funds. In the case of One Grove, the National Pension Service disclosed its investment balance while keeping the building name non-public. According to National Pension Service disclosures, the investment balance in nine Aegis Asset Management funds with publicly disclosed fund names stood at 2.3034 trillion won as of the end of last year, an increase of 8.5% over one year.
The National Pension Service resumed new investments in domestic real estate projects, which had been on hold since Magok One Grove in 2021, starting with the redevelopment project for The Exchange Seoul (TES) near Seoul City Hall in August 2024. Since then, new capital commitments have continued, including the selection of Samsung SRA, KB, and Capstone Asset Management as delegated managers for domestic real estate core platform funds. Aegis Asset Management repeatedly inquired about its intention to participate in the National Pension Service's business announcements but failed to be selected for any real estate-related projects since Magok One Grove. In last year's selection of delegated managers for the core platform fund, it was among the six firms that passed the first-round proposal review but was excluded from the final selection.
It is known that when Taeyoung Construction, the construction company for Magok One Grove, entered corporate workout (Corporate Restructuring Action) in 2023, the National Pension Service adopted a policy to strengthen its involvement in decision-making and management of the manager. Additionally, the National Pension Service protested, claiming confidential information had been leaked, after it was revealed that reports on National Pension Service delegated asset funds were provided to Hanwha Life, Heungkuk Life, and Hill House, which were participating in the final bidding process during due diligence for the sale of Aegis Asset Management's management rights last year.
In response, the IB industry reacted that it is a stretch to view the due diligence procedures required in a typical M&A (mergers and acquisitions) process as a leak of state secrets. The side of Aegis Asset Management also stated that they merely conducted due diligence in accordance with international protocols (standards).
The Real Estate Investment Division of the National Pension Service Fund Management Headquarters pushed for a plan to change the delegated manager for Centerfield in Yeoksam-dong, Seoul, from Aegis Asset Management to Koramco Asset Management. However, the Legal Support Team under the Corporation's Compliance Support Office opined that the sole reason of damaged trust between the investor and the manager was not sufficient grounds for replacement. The Compliance Support Office also raised concerns about conflicts of interest due to a former National Pension Service executive re-employing at Koramco, and ultimately, the change of manager fell through.
The previous head of the Real Estate Investment Division received notice of dismissal after going through a disciplinary committee last month. According to documents submitted by the National Pension Service to the National Assembly, an internal audit determined that the former head had committed serious regulatory violations, including abusive behavior (gapjil). However, the specific reasons for the dismissal were not disclosed.
It is expected to become clear in the next delegated manager selection whether the gap in new capital commitments from the National Pension Service to Aegis Asset Management was a temporary judgment under the previous head's regime or a long-term trend that will be maintained even after the change of heads.
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