이 기사는 2021년 05월 11일 08:00 thebell 에 표출된 기사입니다.

Lee Do-yoon, a former chief investment officer (CIO) of South Korea's Police Mutual Aid Association (PMAA), has been named as CIO of the Yellow Umbrella, the mutual aid association under the Korea Federation of Small and Medium Businesses, industry sources said on Friday.

Lee will replace Jeong Du-yeong, who is retiring at the end of this month after a two-year term. Jeong was widely expected to serve one more year thanks to his performance and achievements during his term.

Yellow Umbrella returned 4.94% last year, exceeding its target return of 3.5%. Performances of bonds and alternative investments also were in line with targets.

With the key figure of the mutual aid fund replaced soon, attention is drawn to whether Yellow Umbrella will proceed with projects that Jeong has carried out.

Jeong has tried to improve efficiency of the mutual aid fund’s investment program system while guaranteeing its independence as much as possible.

Yellow Umbrella is operated based on the Small and Medium Enterprise (SME) Cooperatives Act. It is required to report plans and results of its investment program to the Ministry of SMEs and Startups, the competent authority, pursuant to Article 36 of the Enforcement Decree of the Act.

Some industry observers have questioned about whether the current system is efficient enough after the announcement of the final results for the institution’s process of selecting external managers was delayed in the first half of 2020.

Industry observers noted that it is inappropriate to apply the SME Cooperatives Act to Yellow Umbrella, which is a mutual-aid association and far from being a cooperative.

Market insiders are also paying attention to whether the Yellow Umbrella’s investment program will be changed. Jeong has lowered the qualifications for the mutual aid fund’s investment program to award mandates to as many firms as possible.

Last year, Yellow Umbrella removed the qualification that private equity firms should have a certain level of commitments from domestic institutional investors. It also held two selection processes for private equity managers in one year.

It has to be seen whether such stance will be maintained during the new CIO’s term. Lee, a fixed-income expert, is said to have been passive in alternative investments at the PMAA.

“I heard that Yellow Umbrella planned to hold two selection processes this year as well,” said an industry source. “However, it is unlikely to hold it in the first half, with the replacement of its CIO.” (Reporting by Byung-yoon Kim)