Hanwha Life CIO says interested in infrastructure debts

Chief Investment Officer of South Korea's Hanwha Life Insurance Shin Minsik said on Wednesday that the company is selectively looking for equities investments in overseas infrastructure because of high valuations.

"Considering the narrowed difference between the yields of equities and subordinated debts, we are raising exposure to infrastructure debt funds with a focus on subordinated debts," he said during a CIO panel session of ASK 2021 Conference.

This year, Hanwha Life deployed $440 million to funds related to impact investing and climate change after its parent Hanwha Group announced decarbonization efforts in January of this year.

As the 2023 introduction of stricter accounting standards, or K-ICS, increase the cost of equity for domestic insurance companies, they are looking for double-digit return, or about 15% IRR, from equity investments. That means their equity investments should shift toward value-add and opportunistic strategies of private equity.

In this regard, Hanwha Life will reduce loan assets, categorized as medium-risk assets and instead, deploy them into safety assets.   

Hanwha Life, with 21 trillion won ($18 billion) in AUM, makes domestic alternatives mainly through project funds. For overseas alternatives, it uses both blind pool funds and separately managed accounts.

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