GLOBAL - South Korea's National Pension Service (NPS) is to open an investment office in London as part of its strategy to double non-domestic holdings, with the UK government hopeful that one of the world's largest pension funds will consider exposure to British infrastructure.

Announced as Britain's deputy prime minister Nick Clegg met with NPS chair Jun Kwang-woo in Seoul, the London office will be the second foreign base for the KRW322trn (€214bn) scheme after it opened an office in New York.

"This is fantastic news, which has the potential to bring considerable investment to the UK and create a significant jobs boost back home," Clegg said in a statement.

The government has hailed the office as a "massive boost" for UK infrastructure projects, with a spokeswoman for the deputy prime minster saying that Clegg and Jun had discussed a "number" of deals in the UK.

She added that Clegg had further detailed the recent £200bn National Infrastructure Plan to the NPS chairman.

Clegg, who said it was important for investors to know of the infrastructure opportunities available in the UK, added: "Investment in infrastructure is a virtuous circle, growing our manufacturing and construction sectors and making Britain more attractive for further investment."

The NPS recently reorganised its internal asset management division to focus on overseas investments - with currently just over 11% of scheme assets allocated to non-domestic holdings.

It still pursues a relatively Korea-centric investment strategy, with KRW271trn held in domestic fixed income and equity at the end of 2010.

Currently, it invests the equivalent of $36bn (€27bn) overseas, with plans to double the sum.

Overseas equity exposure accounted for less than 7% at the end of 2010, with fixed income at 4%.

The NPS currently holds a stake in London's Gatwick airport and owns HSBC's headquarters in London's financial district of Canary Wharf.

It previously bought stakes in two central London office buildings for £260m (€290m).

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