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 South Koreans to take stake in Gatwick
By Christian Oliver in Seoul
Published: February 1 2010 22:15

South Korea’s National Pension Service, the world’s fifth biggest pension fund, will next week take a 12 per cent stake in Gatwick airport, stressing that investment in Britain will play a significant role in quadrupling its international exposure.

The NPS, which is aiming to expand its overall portfolio from $240bn to $400bn by 2014, came to the attention of Britain’s financial community last year when it bought the headquarters of HSBC in Canary Wharf for £773m ($1.2bn) in cash.

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Korea pension fund widens its horizons - Feb-01Tower sold for third time in two years - Nov-14Firm hand for era of airport competition - Feb-01Jun Kwang-woo, NPS chairman, who is spearheading a sweeping international expansion, said the fund would look to lift its exposure to Britain from the current 1.3 per cent.
“Some infrastructure-related investment ahead of the London Olympics in 2012 could be very interesting and that could generate some momentum. The regulatory framework is very stable and reliable,” Mr Jun said.

Gatwick airport was sold late last year to Global Infrastructure Partners, an infrastructure fund backed by Credit Suisse and General Electric, for £1.51bn. Mr Jun said that taking a 12 per cent equity stake in the airport represented an investment of a little less than £100m.

The Gatwick deal is being financed with bank debt accounting for 45 per cent of the purchase price.

“We are part of a consortium,” Mr Jun said. “In our investment strategy, for the time being and foreseeable future, we will look for possibilities to join forces with big international players. This is an opportunity for big financial players.”

The fund is also targeting an aggressive expansion into equities, which will give it a greater role in enforcing corporate governance in South Korea.