Key Takeaways
- • Labor unions representing eight South Korean pension funds and the Korea Investment Corporation (KIC) met Seoul Deputy Mayor for Political Affairs Park Chan-koo on the 4th to oppose relocating these institutions to provincial areas, warning of weakened financial competitiveness.
- • The eight pension funds held 179.4487 trillion won (approximately $133.5 billion) at end-2025, and KIC held $232 billion in assets under management, with combined assets cited at roughly 490-512 trillion won depending on the figure used.
- • Pension funds allocate 60-70% of assets to alternatives such as private credit, PEFs, infrastructure and real estate, which the unions say depend on constant in-person contact with global managers and advisers.
- • KIC union chairman Jang Joo-ho proposed linking KIC and pension fund global networks to regional projects as an alternative to relocation.
- • The dispute is ongoing following the government's decision to relocate the Financial Services Commission to Sejong, with Seoul Mayor Oh Se-hoon opposing relocation of Seoul-based financial institutions.
Summary
Labor unions representing eight South Korean pension funds and the Korea Investment Corporation (KIC) met with the Seoul Metropolitan Government to argue that relocating these institutions to provincial areas would weaken the competitiveness of the country's financial industry. According to the unions, which announced the meeting on the 5th, representatives met Park Chan-koo, Seoul Deputy Mayor for Political Affairs, on the afternoon of the 4th. Attendees included union chairmen from pension funds covering teachers, government employees, military personnel, police, science and technology professionals, construction workers, local government finance and firefighters, along with the KIC union chairman.
The unions cited the scale of the capital involved. As of end-2025, the eight pension funds held 179.4487 trillion won (approximately $133.5 billion), roughly a quarter of this year's 728 trillion won government budget. Adding KIC's $232 billion in assets under management, the institutions channel more than 500 trillion won into global markets. Reported combined totals vary by source, ranging from approximately 491 trillion won ($365.3 billion) to 512 trillion won ($380.9 billion); the primary report notes that won conversions of KIC's dollar assets are reference figures at the end-2025 exchange rate.
The council argued that the funds' role as key counterparties for overseas asset managers and global institutions would shrink if they left Seoul. "If the pension funds leave Seoul, the contact points built with global investment institutions will inevitably shrink," the council said. The unions emphasized that major pension funds allocate 60-70% of assets to alternatives, including private credit, PEFs, infrastructure and real estate. Because deal sourcing and negotiating power depend on constant information exchange with financial institutions, asset managers and advisory firms, the council said physical distance would create bottlenecks in real-time deal closing and risk management. It called relocation a structural reorganization of asset management infrastructure that should not proceed without sufficient verification.
KIC union chairman Jang Joo-ho went further, calling KIC "South Korea's only sovereign wealth fund" and an anchor for global asset managers. He proposed that the city use KIC's and the pension funds' global networks to connect overseas capital with regional projects, which he said would deliver more substantive balanced regional development than relocation. KIC's union, established for the first time in the fund's 21-year history, reflects growing internal opposition as the issue has gained prominence.
The dispute sits within the government's "Seoul as the economic capital, Sejong as the administrative capital" framework, following the decision to relocate the Financial Services Commission to Sejong. Seoul Mayor Oh Se-hoon has opposed relocating Seoul-based financial institutions, stating that "Seoul is the most suitable location as Asia's financial hub." In remarks at Seoul Fintech Week 2026 in late October, he referenced concerns about Seoul's competitiveness after the Sejong decision.
Industry views, as reported, hold that the central issue is preserving contact with global asset managers and retaining investment review personnel and decision-making functions rather than relocation itself. Market observers suggest the dispute could affect South Korean institutions' overseas alternative investment pipelines in the short term, as global PEFs have worked with pension and KIC investment review teams concentrated in Seoul. Others note that balanced regional development and easing Seoul metropolitan concentration also remain policy priorities.
The unions cited the scale of the capital involved. As of end-2025, the eight pension funds held 179.4487 trillion won (approximately $133.5 billion), roughly a quarter of this year's 728 trillion won government budget. Adding KIC's $232 billion in assets under management, the institutions channel more than 500 trillion won into global markets. Reported combined totals vary by source, ranging from approximately 491 trillion won ($365.3 billion) to 512 trillion won ($380.9 billion); the primary report notes that won conversions of KIC's dollar assets are reference figures at the end-2025 exchange rate.
The council argued that the funds' role as key counterparties for overseas asset managers and global institutions would shrink if they left Seoul. "If the pension funds leave Seoul, the contact points built with global investment institutions will inevitably shrink," the council said. The unions emphasized that major pension funds allocate 60-70% of assets to alternatives, including private credit, PEFs, infrastructure and real estate. Because deal sourcing and negotiating power depend on constant information exchange with financial institutions, asset managers and advisory firms, the council said physical distance would create bottlenecks in real-time deal closing and risk management. It called relocation a structural reorganization of asset management infrastructure that should not proceed without sufficient verification.
KIC union chairman Jang Joo-ho went further, calling KIC "South Korea's only sovereign wealth fund" and an anchor for global asset managers. He proposed that the city use KIC's and the pension funds' global networks to connect overseas capital with regional projects, which he said would deliver more substantive balanced regional development than relocation. KIC's union, established for the first time in the fund's 21-year history, reflects growing internal opposition as the issue has gained prominence.
The dispute sits within the government's "Seoul as the economic capital, Sejong as the administrative capital" framework, following the decision to relocate the Financial Services Commission to Sejong. Seoul Mayor Oh Se-hoon has opposed relocating Seoul-based financial institutions, stating that "Seoul is the most suitable location as Asia's financial hub." In remarks at Seoul Fintech Week 2026 in late October, he referenced concerns about Seoul's competitiveness after the Sejong decision.
Industry views, as reported, hold that the central issue is preserving contact with global asset managers and retaining investment review personnel and decision-making functions rather than relocation itself. Market observers suggest the dispute could affect South Korean institutions' overseas alternative investment pipelines in the short term, as global PEFs have worked with pension and KIC investment review teams concentrated in Seoul. Others note that balanced regional development and easing Seoul metropolitan concentration also remain policy priorities.
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