Korea Investment Corporation (KIC) and National Agricultural Cooperative (NACF) will launch a joint overseas alternative investment fund to support the development of domestic financial businesses and increase long-term yields.
NACF Chief Investment Officer Hakjoo Park said a memorandum of understanding had been signed with KIC last year, the MK news reported on Thursday (July 2).
Under the law KIC can only manage assets entrusted by the Ministry of Economy and Finance (MOEF), Bank of Korea (BOK), National Pension Service and Government Employees Pension Service. MOEF and BOK have entrusted a combined $108.1 billion (130 trillion won) to KIC, which has grown to $157.3 billion with increased revenues.
NACF has total assets of 402 trillion won ($335 billion), but its rate of return was a lowly 0.42% in 2019 due to losses from business sectors which are close to the public service.
“The importance of deal sourcing has become significant in situations where targets for investment are limited despite an increase in assets,” Park said. “We would like to share KIC’s global networking ability as local institutions have no chance to participate in promising investment deals in other countries.”
KIC is working to expand joint investments with institutional investors such as local pension funds and mutual aid associations.
“We will promote joint investment plans so that domestic institutional investors can join in overseas investment deals,” Chief Executive Officer Heenam Choi said.
Choi also shared his vision for KIC to become a top-notch sovereign wealth fund with operating assets of $400 billion in 2035 by supporting the development of the South Korean financial industry and enhancing long-term profitability. (Reporting by Hyewon Chang)