South Korea’s sovereign wealth fund, Korea Investment Corporation, is aiming to increase the assets under its management to $200 billion in three years’ time.
Eun Sung-soo, KIC's chief executive officer, reportedly announced the ambitious expansion plans at the sovereign wealth fund’s 12th anniversary ceremony earlier this week, according to the state news agency Yonhap.
The 2020 target, if achieved, would almost double KIC’s current assets under management, which amounted to $110.8 billion in 2016, as per the latest annual report. The fund achieved a total return of 4.35 percent last year, in comparison to -3 percent returns generated in 2015, a feat that Eun has attributed to the returns on alternative investments.
The state fund has been consistently increasing the proportion of alternative investments in its portfolio in a bid to diversify. In 2016, 13.7 percent of KIC’s portfolio was invested in alternative assets, which include hedge funds, private equity, real estate and infrastructure, up from 12.4 percent allocation at the end of 2015.
Within alternative investments, real estate and infrastructure together account for the highest allocation at 5.1 percent, followed by private equity at 4.2 percent.