Author: Zen, PANews
On July 25, at an event called "Silicon Valley Venture Capital Meeting" hosted by South Korean President Lee Jae-myung, the National Pension Service (NPS) of South Korea signed a memorandum of cooperation with six leading venture capital institutions from the United States.
Sitting on the other side of the negotiation table were Sequoia Capital, a16z, Khosla Ventures, Lightspeed Venture Partners, General Catalyst, and NEA. These six institutions collectively manage approximately $313 billion in assets, with investment histories that include well-known tech giants such as Apple, NVIDIA, Google, OpenAI, and Anduril.
According to the memorandum of cooperation, both sides plan to establish long-term collaboration channels, explore global venture capital opportunities, and share market and project information. The South Korean government set the stage for this meeting, but it was the National Pension Service managing nearly 169 trillion won (about $116 billion) that came in with the real ledger.
In South Korea, individual investors referred to as "Western Academic Ants" have long been accustomed to opening brokerage software late at night, waiting for the New York stock market to open. Data from the Korea Securities Depository shows that as of June 2, 2026, the market value of U.S. stocks held by domestic investors through local brokerages reached approximately $206.3 billion, a historic high. After entering July, the inflow of funds accelerated again, with a cumulative net purchase of U.S. stocks amounting to about $2.596 billion from July 1 to 24, already reaching about four times the total for the entire month of June.
One entity bears the responsibility for national pensions, while the other pursues personal wealth growth. The investment horizons, risk tolerance, and institutional constraints of these two types of funds differ significantly, but both are increasingly crossing the Pacific.
The "Western Academic Ants" at Midnight and the Pension Fund That Local Markets Struggle to Bear
The enthusiasm of South Korean retail investors for U.S. stocks has continued for many years. In the investment context of South Korea, individual investors staying in the domestic stock market are called "Eastern Academic Ants," while those venturing into overseas markets are referred to as "Western Academic Ants."
The U.S. stock market and Seoul are in different time zones, with normal trading hours coinciding with the late night in Korea. However, this is not an issue for night-owl Koreans. Additionally, with South Korean brokerages offering foreign currency exchange, fractional share trading, and extended service hours, the process of buying U.S. stocks is not much different from purchasing Korean stocks.
This surge is composed of two factors. One part of the funds is making normal global allocations. The South Korean economy has strong industries such as semiconductors, automobiles, batteries, and shipbuilding, but the structure of listed companies is relatively concentrated; the other part carries a stronger speculative character. South Korean retail investors have long favored thematic stocks, leveraged products, and high-volatility assets. Investments concentrate rapidly during bullish trends, and panic-selling easily occurs when market conditions reverse.
Recently, South Korean regulatory authorities tightened the entry requirements for single-stock leveraged ETFs in order to control the market volatility arising from the concentration of individual funds.
NPS's move overseas is driven by a different logic.
The South Korean National Pension System was launched in 1988, resembling a nationwide public pension insurance scheme. Starting in July 2026, employees will contribute 9.5% of their assessed monthly income to the pension fund, with both employers and employees bearing 4.75% each; individual contributors typically bear the entire payment themselves. After paying current pensions, the remaining funds are invested by NPS in stocks, bonds, real estate, infrastructure, and private equity funds.
As of the end of April 2026, the assets of the National Pension Fund reached 167 trillion won. Since the system was established, it has received a total of 945.5 trillion won in income from premiums and other sources, with total investment returns reaching 1,177.9 trillion won; expenditures related to pension payments and management have amounted to 452.8 trillion won.
Notably, the funds earned from NPS's investments over the years have already surpassed the total premiums received. This has allowed it to move beyond merely the administrative role of "collecting premiums and paying pensions."
In 2025, South Korea completed its first significant national pension reform in 18 years, raising the contribution rate from the original 9% to a gradual increase of 13%, while adjusting the pension replacement rate. This reform will delay the projected exhaustion of the fund, but the financial pressure from South Korea's aging population continues to rise. In the future, investment returns will become an important variable in prolonging the fund's lifespan.
At the same time, NPS has grown so large that it is difficult to maintain a concentrated investment within South Korea.
As of the end of April 2026, NPS had 93.07 trillion won allocated overseas, accounting for 55.7% of its financial assets. This includes 60.45 trillion won in overseas stocks, 10.31 trillion won in overseas bonds, and approximately 22.14 trillion won in alternative overseas assets. The domestic investment proportion stands at 44.3%.
If such a large amount of capital remained mainly in South Korea, NPS would continuously increase its holdings in large companies like Samsung Electronics and SK Hynix, significantly influencing market prices during trades. Given the high industry concentration in the South Korean stock market, if pensions, employment, resident income, and investment portfolios all rely on the domestic economy simultaneously, the risks would compound.
Thus, expanding overseas investments serves dual purposes: on one hand, to seek richer sources of revenue, and on the other, to lower the constraints of local market capacity and single economic cycles. Reuters has estimated NPS's asset size to be equivalent to about 60% of South Korea's GDP, a scale that dictates it must arrange funds on a global basis.
From the New York Public Market to the Silicon Valley Private Equity Circle
NPS's entry into Silicon Valley is not a sudden shift.
In 2002, NPS began entrusting external organizations to manage overseas stocks; in 2005 it entered global alternative investments; in 2011, it established an office in New York, followed by expansions in London and Singapore. In 2024, NPS opened an office in San Francisco, extending its reach to the area most concentrated in U.S. technology startups and venture capital.
Today, over half of NPS's financial assets are managed by external organizations. While pensions can directly purchase publicly traded stocks and bonds, when entering the private equity, venture capital, real estate, and infrastructure sectors, it relies more on professional managers for sourcing projects, due diligence capabilities, and local networks.
The U.S. occupies an important position in this global allocation. The latest 13F filing submitted by NPS to the U.S. Securities and Exchange Commission shows that as of the end of March 2026, its disclosed holdings in U.S.-listed securities were valued at approximately $131.7 billion, encompassing 562 assets. The 13F only covers U.S.-listed securities that meet filing requirements, unable to represent all of NPS's investments in the U.S., but it is already sufficient to demonstrate its scale on Wall Street.
Signing agreements with six VC firms, such as Sequoia and a16z, further advances this route into the Silicon Valley venture capital ecosystem.
The large tech companies in the public market have entered a mature stage, while early projects in artificial intelligence, robotics, biotechnology, and defense technology are primarily controlled by VCs. NPS building teams to search for, evaluate, and manage these startups individually incurs high costs and lacks local networks. Establishing fixed cooperation channels with top VCs can help it access fund shares, growth-stage projects, and market information.
For the six VCs, NPS is equally attractive. Venture capital firms need to continuously raise new funds, and public pension funds are large and long-term, making them an important source of institutional limited partners. Especially in the context of expanding financing rounds in AI infrastructure, robotics, and deep tech, the value of long-term capital becomes even more pronounced.
However, this MOU remains a cooperation roadmap at present. The official disclosures mainly focus on discovering global investment opportunities, information exchange, and long-term cooperation, with no specific fund commitments and no evidence to indicate that NPS has concentrated large amounts of funds with the six institutions. NPS emphasized in its announcement that it will assess investment opportunities, market conditions, and risk factors before gradually expanding its overseas venture investments.
Additionally, the South Korean government hopes this channel will also serve local startups. Information released by the Presidential Office mentioned discussions on investing in South Korean startups and entering the global market; a16z has also established an office in South Korea. For NPS, the primary measures are investment returns and the safety of pension funds. Meanwhile, by helping Korean companies connect with Silicon Valley, it may also lead to industrial spillover.
One Direction for the Dollar, Two Different Risks
Both South Korean retail investors and NPS are expanding overseas investments, but they are engaging in completely different transactions.
Retail investors can concentrate their funds on a few tech stocks and can also use leverage to chase short-term trends. NPS needs to manage stocks, bonds, real estate, infrastructure, and private assets simultaneously, with investment horizons spanning decades. While individual investment losses are borne by families, a significant misstep with pension funds can affect the entire society's pension expectations.
Their true commonality lies in their awareness of the boundaries of the South Korean local market.
Ordinary investors seek growth opportunities from U.S. tech companies; NPS, however, must find sufficiently numerous and diversified assets for a fund that exceeds 1600 trillion won. When the South Korean economy fails to provide complete industry exposure and market capacity, funds naturally extend into global markets, with the U.S. being one of the most crucial destinations.
This choice is also beginning to create macro impacts.
Purchasing overseas assets requires exchanging for dollars. Continuous buying of U.S. stocks by South Korean retail investors and NPS's increasing overseas allocation both contribute to the demand for dollars. At the beginning of 2026, the buying frenzy of U.S. stocks by South Korean retail investors was seen as one of the significant internal factors putting pressure on the won; NPS's forex operations are even larger, with single adjustments potentially affecting market supply and demand.
To reduce the shock caused by NPS’s concentrated dollar purchases in the spot market, the Bank of Korea has extended the forex swap arrangements with NPS to the end of 2026. NPS can obtain dollars for overseas investments through the central bank’s foreign exchange reserves, lowering the need to directly sell won; moreover, during rapid depreciation of the won, NPS will also undertake strategic forex hedging.
This situation has created a longstanding balancing act in South Korean policy: pensions require global diversification and higher returns, while stability in exchange rates and local capital markets hope for funds to remain moderately within domestic borders.
In May 2026, NPS raised its domestic stock target ratio for the end of the year to 20.8%, while also setting a target of 35.6% for overseas stocks by the end of 2027. This adjustment not only considers the rise in the South Korean stock market but also responds to the pressures overseas investments place on the won, indicating that NPS's global path will be continuously calibrated with the market environment.
Therefore, NPS's entry into Silicon Valley does not mean that the South Korean government is starting to leverage national pension funds for a high-risk tech gamble. Rather, it is more of an extension of its global allocation strategy developed over more than two decades: with the fund's size continuously increasing, limited domestic market capacity, and demographic structures requiring it to pursue higher, more diversified long-term returns. In this respect, pensions in countries like the Netherlands and Switzerland have already taken the lead.
What truly deserves attention is that the wealth structure of South Korean residents is changing. Work, real estate, and pension responsibilities remain rooted in Korea, but an increasing number of financial assets are seeking growth in the U.S. and global markets. The MOU signed between NPS and six Silicon Valley VCs is merely the latest milestone in this process.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
