Korea launches $1.2bn infrastructure fund

The Korean Ministry of Planning and Budget has sanctioned the launch of a $1.2bn fund infrastructure fund to be managed by KB Asset Management and backed by 17 local institutional investors.

Korea’s Ministry of Planning and Budget has given KB Asset Management the green light to launch a KRW 1.2 trillion ($1.2 billion; €1.04 billion) infrastructure fund aimed at toll roads and railways investments across the nation in the next 15 years, according to The Korea Herald.

KB Asset Management, a subsidiary of Korea’s Kookmin Bank that is co-sponsoring the fund, is leading the project together with 17 institutional investors including Korean pension funds and insurers. The fund will invest in several highways, urban beltways and bridges, and expects to reap an annual return of around 11 percent.

The fund is expected to seek a stock market listing, according to a quote attributed to KB Asset Management.

The new fund joins three other already existing infrastructure vehicles that are currently operating in Korea, which have invested some KRW 1.6 trillion won in 17 capital projects as of end 2005. Several other infrastructure funds are currently seeking approval from the Ministry.