Korea scientists fund sees US-China conflict create infra investments

The Korea Scientists and Engineers Mutual-Aid Association's (SEMA) Chief Investment Officer Huh Sung-moo said on Wednesday that climate change and global efforts to reduce carbon emissions will create huge investment opportunities in the infrastructure sector.

In addition to the demand for upgrading traditional infrastructure facilities, the growing conflict between the US and China will spur investments in information and telecom facilities, Huh added. 

"We expect there will be huge investment opportunities in infrastructure as developed countries led by the US will likely bring forward infrastructure investments in both existing infrastructure and information and technology-related facilities to cope with China's growing power," Huh said during a CIO panel session of ASK 2021 Conference.

The scientists fund, with 8.9 trillion won ($7.6 billion) in assets as of end-September, barely made infrastructure investments last year because of the COVID-19 pandemic, which rendered it almost impossible to conduct onsite due diligence.

"In addition to solar and wind energy facilities, we are looking closely at hydrogen, energy storage facilities such as batteries and infrastructure related to energy transportation and distribution, as well as the relevant technologies," Huh told a panel session of the ASK 2021 Conference on Oct. 27. 

It is also diversifying into new types of infrastructure-to-be facilities such as low earth orbit satellites and telecommunication towers. Additionally, SEMA will take into more consideration the environmental, social and governance (ESG) standards for both infrastructure and corporate investments.

"If carbon border taxes are introduced, the corporate value will depend on their capability of achieving carbon neutrality, Huh said. 

Border taxes are a measure to impose costs on goods imported to a certain country if they emit more carbon than locally-produced ones.

SEMA is more interested in equities and private debt, and will expand technology startup investments through venture capital funds. Alternatives make up 63% of its total assets.

Write to Jong-woo Kim at jongwoo@hankyung.com
Yeonhee Kim edited this article