Baek Joo-hyun Appointed as New CIO of the 33 Trillion Won PSTP… Challenge to Sustain Record Performance

Baek Joo-hyun, former Head of Fund Management at the Government Employees Pension Service, has been selected as the next Chief Investment Officer (CIO) of the Private School Teachers’ Pension (PSTP). An alternative investment specialist with experience at both insurance companies and public pension funds will now become the new manager of the 33 trillion won PSTP fund. Baek is now tasked with maintaining the record-breaking performance achieved last year by the PSTP amid increasingly complex investment conditions.

According to the investment banking industry on July 9, the PSTP began the public recruitment process for its next CIO in May. After conducting interviews, reference checks, and personnel verification, the organization held a personnel committee meeting on July 8 and selected Baek as the next Head of Fund Management.

Baek reportedly received the highest score in the recently held final interview. A total of 26 candidates applied for this open recruitment, and after the document screening process, approximately five finalists were shortlisted, with four candidates participating in the final interview.

This appointment follows the departure of former Fund Management Head Jeon Beom-sik, who took up the role of Head of Fund Management at the National Federation of Fisheries Cooperatives. The PSTP plans to formalize Baek’s appointment soon after completing the necessary administrative procedures.

Extensive Experience in Insurance and Pension Funds… Successfully Reappointed as Government Employees Pension CIO

Born in 1970, the new CIO Baek began his career in finance at the Export-Import Bank of Korea after graduating from Hankuk University of Foreign Studies with a degree in economics. He later earned an MBA from Duke University in the United States and worked for about 20 years at the Asset Management Headquarters of Samsung Life Insurance. During his tenure, Baek gained experience in overseas investment, asset allocation, and alternative investments, including assignments at Samsung Life’s New York branch, financial strategy, and alternative investment divisions.

After moving to the Government Employees Pension Service as CIO in 2022, Baek oversaw the management of funds ranging from 8 trillion to 12 trillion won. Even during periods of heightened market volatility, he focused on maintaining stable asset allocation principles and identified new alternative investment assets such as senior housing, data centers, and infrastructure through joint investments with overseas pension funds. He also pushed for internalization of investment capabilities by introducing a direct management system for overseas equities. In 2023, the Government Employees Pension Service achieved its highest investment asset return since 2006, and Baek secured reappointment as CIO based on these results.

Analysts note that the PSTP’s choice of Baek as CIO reflects a high regard for his proven management experience. Recently, CIO appointments at pension funds have placed greater emphasis on long-term asset allocation and risk management skills rather than aggressive investment tendencies. Due to increased difficulty in fund management caused by interest rate volatility, geopolitical risks, and delays in exits from alternative investment markets, experience in actually leading public pension fund management organizations has become a significant advantage.

Record-breaking Performance Must Continue… Focus on Overseas and Alternative Investment Rebalancing

The performance of the PSTP fund that Baek will inherit is strong. Last year, the PSTP recorded a fund management return of 18.9% and investment income of 4.8 trillion won, achieving its best-ever results. The fund’s size has grown to nearly 33 trillion won, and it has received the highest “Excellent” grade for five consecutive years in the Ministry of Economy and Finance’s fund management evaluation. The previous leadership was recognized for both investment performance and management systems.

Such high performance, however, is also a burden for the new CIO. It will not be easy to replicate last year’s high returns, and the investment climate has become even more complicated. Uncertainties in the global interest rate path, adjustments in overseas real estate values, and delayed exits in private markets are all prompting pension funds to re-examine their alternative investment strategies.

The PSTP has been seen as having relatively limited overseas investment infrastructure compared to the size of its fund. Expanding its overseas investment network, strengthening collaboration with leading global asset managers, and building a risk management system commensurate with increased overseas assets are considered key tasks for the new CIO. At the same time, Baek will be required to fine-tune both domestic and overseas asset allocation strategies without undermining the achievements of his predecessor.

Given the high standard set by the PSTP, Baek’s more than 20 years of management experience and practical know-how from public pension funds will once again be put to the test, as he is expected to safeguard both stability and profitability.

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