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Korean sovereign wealth fund KIC to allocate $10bn to alternative assets

9 Aug 2013

Korean sovereign wealth fund KIC is to allocate up to $10bn to alternative assets, according to CIO Lee Dong Ik, speaking with Bloomberg.

Alternatives could comprise up to 20 per cent of its portfolio by 2016, up from 6.1 per cent in 2012, the report said. Other large institutional investors that have upped their allocations to private markets include Singapore sovereign wealth investor Temasek, with 27 per cent, and Australian pension fund Future Fund, which recently doubled its exposure to private equity and real estate to 13 per cent.

Lee said, “We are going to spend between $5bn and $10bn on alternative assets over the next three years. We like to have a balanced portfolio in terms of strategies and regions.”

KIC was established in July 2005 to “enhance sovereign wealth” and contribute to the development of the domestic financial industry. It is mandated to manage assets entrusted by the Government and the Bank of Korea and has some $57bn of assets under management.

It began investing in areas such as real estate and private equity in 2009. Private equity returned 11 per cent, according to its 2012 annual report.

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