KIC to raise alternative investments to 25% by 2027

Korea Investment Corp. (KIC) plans to increase alternative investments to a quarter of its portfolio by 2027 from the current 16%, its CEO Jin Seoungho reiterated on Oct. 27.

“Alternative investments cannot help increasing as a pandemic changed the social and structural paradigm,” Jin said during ASK 2021, Asia’s top alternative investment forum in Seoul hosted by The Korea Economic Daily, referring to COVID-19.

He picked up technology, healthcare, digital infrastructure, renewable energy, logistics and infrastructure as promising alternative investment sectors in the future.

In July, Jin unveiled the fund’s plan to ramp up alternative investments to 25%. The portion of the alternative investments fell in 2019 and 2020 due to the strong performance of traditional assets such as equities, but the decline did not indicate KIC's shift from the plan as the amount of the alternative investments has been increasing, the fund said in a recent parliamentary Q&A session.

South Korea’s sovereign wealth fund was managing more than $200 billion as of the end-August, investing all of its assets in overseas markets. KIC has been expanding investment since it started with a $1 billion investment in foreign bonds in 2006.

“Global investment kept growing and operating assets leading to investment have exceeded $11 trillion with annual growth of more than 15% in the last five years,” Jin said. “Given such an environment, alternative investments will keep growing.”

But the trend made it more difficult to invest in excellent assets at “reasonable prices,” Jin added. To cope with recent changes in the investment environment, KIC has set up a unit for future strategies and strengthened the function of its investment control tower.

Write to Jae-Fu Kim at hu@hankyung.com
Jongwoo Cheon edited this article.