Key Takeaways
- • National Pension Service of South Korea appointed Polar Asset Management Partners as its ninth hedge fund manager in Q3 2021, expanding the world's third-largest pension fund's alternative investment roster announced November 29.
- • Polar Asset manages $7.1 billion in assets and employs a diversified multi-strategy approach including convertible arbitrage, equity arbitrage, event-driven investing, fixed income, US equity long/short, structured credit, and North American micro-cap strategies, with emphasis on Canadian markets.
- • NPS now partners with nine hedge fund managers total, including established names such as BlackRock, GCM Grosvenor, Marshall Wace, Crabel Capital, Pentwater Capital, Diameter Capital Partners, Select Equity Group, and Waterfall Asset Management, reflecting a phased expansion strategy since 2016.
- • Paul Sabourin, Polar Asset's co-founder and Chief Investment Officer, serves as the lead portfolio manager and sets investment strategy for the firm's multi-strategy team.
- • NPS's hedge fund allocation strategy has evolved from fund-of-funds to single-manager mandates, beginning with $500 million commitments to BlackRock and GCM Grosvenor in 2016, followed by a 1 trillion won ($750+ million USD equivalent) multi-manager allocation in 2019.
Summary
The National Pension Service of South Korea, the world's third-largest pension fund, has broadened its hedge fund manager roster by appointing Toronto-based Polar Asset Management Partners as a new mandate in the third quarter of 2021. The selection, announced on November 29, represents NPS's continued diversification strategy within alternative investments and increases its total hedge fund manager partnerships to nine firms.
Polar Asset, founded in 1991, brings $7.1 billion in assets under management to the partnership. The firm operates a sophisticated multi-strategy platform encompassing convertible arbitrage, equity arbitrage, event-driven strategies, fixed income, US equity long/short positioning, structured credit, and North American micro-cap investments, with particular expertise in Canadian markets. Paul Sabourin, the firm's co-founder and Chief Investment Officer, leads portfolio management and investment strategy development across the multi-strategy platform.
NPS's hedge fund allocation has evolved methodically over five years. The pension fund initiated hedge fund investing in 2016 by designating BlackRock and GCM Grosvenor as general partners for fund-of-hedge-fund strategies, committing $500 million to each manager. By 2019, NPS expanded its approach to include direct single-manager mandates, allocating 1 trillion won across four specialized firms: Marshall Wace (quantitative and long/short equity strategies), Crabel Capital (systematic managed futures and currency trading), Pentwater Capital, and Waterfall Asset Management. The Polar Asset appointment represents the continuation of this selective single-manager expansion.
The current hedge fund manager consortium also includes Diameter Capital Partners and Select Equity Group, reflecting NPS's focus on diversified strategy exposure and geographic reach across North American and global markets. This structure positions the pension fund to access both systematic, quantitative approaches and discretionary, event-driven opportunities across multiple manager specializations.
Polar Asset, founded in 1991, brings $7.1 billion in assets under management to the partnership. The firm operates a sophisticated multi-strategy platform encompassing convertible arbitrage, equity arbitrage, event-driven strategies, fixed income, US equity long/short positioning, structured credit, and North American micro-cap investments, with particular expertise in Canadian markets. Paul Sabourin, the firm's co-founder and Chief Investment Officer, leads portfolio management and investment strategy development across the multi-strategy platform.
NPS's hedge fund allocation has evolved methodically over five years. The pension fund initiated hedge fund investing in 2016 by designating BlackRock and GCM Grosvenor as general partners for fund-of-hedge-fund strategies, committing $500 million to each manager. By 2019, NPS expanded its approach to include direct single-manager mandates, allocating 1 trillion won across four specialized firms: Marshall Wace (quantitative and long/short equity strategies), Crabel Capital (systematic managed futures and currency trading), Pentwater Capital, and Waterfall Asset Management. The Polar Asset appointment represents the continuation of this selective single-manager expansion.
The current hedge fund manager consortium also includes Diameter Capital Partners and Select Equity Group, reflecting NPS's focus on diversified strategy exposure and geographic reach across North American and global markets. This structure positions the pension fund to access both systematic, quantitative approaches and discretionary, event-driven opportunities across multiple manager specializations.
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