Korea Federation of Community Credit Cooperatives (KFCC) has stopped all new overseas investments and turned to domestic real estate development and infrastructure investment, Construction News reported on May 22.
Earlier this year the KRCC planned to increase its overseas investments seeking higher returns on fund management but the Covid-19 pandemic interrupted the plan.
“A considerable sum of 70 trillion won ($5.6 billion) sized asset under management is invested in safe treasury bonds,” said a KFCC official. “However, it is a mid- and long-term policy to increase alternatives overseas more aggressively because the low interest rate is hindering margins.”
As of the end of 2018, the KFCC used about 46 trillion won for its investments. Investment in bonds amounts to 39 trillion won. The overall return on investment was 2.45 percent as of the end of 2018, but for alternatives it was 5.84 per cent.
The KFCC tried to increase the portion of its overseas investments by investing 7 trillion won in alternative investment blind funds for three years starting this year. However, overseas investment stopped because of Covid-19 and the KFCC is now focusing on high-yield domestic real estate development projects and corporate finance-related loans. (Reporting by Hye-won Chang)