South Korea's pension fund to acquire 12-per cent stake in Gatwick airport

South Korea's state pension fund, the National Pension Service (NPS) is planning to acquire a 12-per cent stake in Britain's Gatwick airport, making it NPS's second major investment in the UK in the past three months.

In November, NPS bought HSBC headquarters in the UK, the HSBC Tower in the Canary Wharf financial district for £772.5 million. (See: HSBC sells UK headquarters to South Korean fund for $1.29 billion)

Although the financial terms have not been disclosed, media speculation pegs the purchase price at around £100 million.

The NPS, the world's fifth-largest pension fund, which manages around $240 billion in assets, is buying the stake from US-based investment fund Global Infrastructure Partners, which had acquired Britain's second busiest airport from BAA in October for £1,455 million.

The NPS was asked by the South Korean government early last year to withhold making investments overseas following the global financial crisis that saw the country's currency, the won, depreciating.

After the won and the US dollar stabilised in June, NPS once again resumed overseas investments as it was under pressure to bolster the fund, which is expected to start losing money from 2060 due to rising pension payments, based on a 2007 South Korean government report on the country's ageing population.

The NPS is planning to enlarge its fund from the current $240 billion to around $400 billion by 2014 and is looking to countries like the UK for expansion with safe returns.