KIC to expand long-term investment in Asia

Korea Investment Corp. (KIC) focused on strengthening venture capital (VC) strategies and expanding co-investments with general partners (GPs) this year, Song Sungjun, head of private equity group at KIC, said on Wednesday in LP panel session of ASK 2021.

"We set up a San Francisco-based corporation in March to accelerate foreign VC investment. Also, KIC has operated an internal VC platform to manage direct investment, co-investment and top-tier indirect VC investment, particularly focusing on technology sector including artificial intelligence, cloud, automatic driving and blockchain."

In addition, Song noted the soverign wealth fund executed some co-investments with GPs in healthcare, technology, media, and telecom (TMT) and e-commerce through a joint venture it founded with Nonghyup last year.

He noted major change for KIC this year was setting up private debt as a separate asset class to strengthen the asset strategy, with a newly-created benchmark for private debt to execute various private debt investments including direct lending investment. Also, the corporation will expand a long-term investment in China through collaborations with other sovereign wealth funds, he said.

"We have kept our main principle for investment: pursuing upside using growth and VC strategies based on buyout strategies. In line with the principle, KIC made various re-up and VC investments in mid and large capital buyout and technology-focused growth strategy indirect funds in North America and Europe," he said. KIC also directly invested in defensive sectors such as investment management service businesses and medical product original equipment manufacturer (OEM) this year, Song noted.  

For the next year, KIC plans to prioritize selective investment opportunities for high-quality assets with high cash-generating efficiency while keeping the corporation’s strategic and regional asset allocation of private equity. The corporation considers a GP stake strategy for investment in other Asian countries besides China, particularly post syndication strategy for both direct investment and co-investment as well as co-underwriting investment.

Song also noted the sovereign wealth fund, as a long-term investor, is not likely to adjust its strategy in the short term to secure illiquidity premium.

KIC’s assets under management (AUM) surpassed $200 billion with more than 10% of internal rate of return as of August. Its alternative assets abroad is less than 20% while private debt and private equity assets take less than 10% of its whole assets. 

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.