Korea Investment Corporation (KIC), the 14th-largest sovereign wealth fund in the world by assets under management, is changing its investment process for foreign startups to implement a more active asset allocation strategy.
KIC is planning to expand its venture investment to enhance returns, according to sources on July 23. The sovereign wealth fund plans to gradually increase investments in startups in developed countries through diverse investment strategies.
KIC started investing in startups by forming a venture fund in 2017. After two years, KIC has changed its management process to improve its asset management efficiency. It has reportedly allocated approximately $200 million to its venture category and made some direct investments.
Investing in startups requires agile decision-making as that market changes quickly compared to other asset classes. Sticking to indirect investments will give KIC more time to make investment decisions. KIC seems to have already begun making direct investments to seize investment opportunities through an speedier decision making process.
The sovereign wealth fund which specializes in overseas investments, has been seeking investment opportunities in high–tech North American startups.
Choi Hee-nam, CEO of KIC, said in a press conference earlier this year that the fund will open an office in San Francisco in the third quarter of this year, to boost its ties with key global players for better access to alternative investment opportunities. KIC currently operates overseas offices in New York, London and Singapore.
As of the end of 2019, the sovereign wealth fund had $157.3 billion of assets under management. The value of the fund’s alternative investments stood at $24.5 billion, of which $9.3 billion was invested in private equity. (Reporting by Hee-yeon Han)