KIC buys $1.9 mn worth of shares in crypto platform Coinbase

Korea Investment Corporation (KIC), managing $205 billion in assets as of the end-2021, has invested in US cryptocurrency exchange platform Coinbase Global Inc. The South Korean sovereign wealth fund acquired 8,700 shares in the crypto platform during the fourth quarter of 2021, according to a US Securities and Exchange Commission (SEC) filing on Feb. 9.

The shares KIC bought are worth $1.9 million. It marks KIC’s first investment in a crypto platform.

The investment was made as Coinbase joined the MSCI All Country World Index last November. “It was not a direct investment from KIC. The acquisition was made via one of our passive funds tracking MSCI ACWI,” a KIC official said. “We haven’t changed our stance that crypto-related assets are not proper for us,” the official added. This aligns with what KIC’s Chief Executive Jin Seoungho said during a press conference last July – he stated that KIC doesn’t plan to invest in crypto-related assets.

Coinbase, listed on the Nasdaq in January 2021, is one of the largest crypto platforms in the US. The company earned $1.3 billion in sales and $291.8 million in operating profit during the third quarter of last year. The performances respectively jumped by 316% and 187%, compared with the same period of 2020. According to Yahoo! Finance, the platform company’s sales during the fourth quarter are estimated at $191 billion. The stock closed at $204.77, down 4.5%, on Feb. 10.

The SEC filing also showed KIC purchased shares in two US electric vehicle makers during the last quarter – 102,700 shares in Lucid Group Inc. and 47,200 shares in Rivian Automotive Inc. The sovereign wealth fund bought 25,900 shares in Affirm Holdings Inc., a US digital payment network system, and 254,403 shares in Grab Holdings Inc., the Southeast tech giant.

Meanwhile, KIC disposed of a lump sum of reopening stocks during the fourth quarter. It sold all of its 861,931 stakes in sports media company World Wrestling Entertainment Inc. The sovereign wealth fund also dumped 2,242,300 shares in Uber Technologies Inc., or 66% of its holdings in the ride-hailing services provider, and disposed of 801,456 shares in United Parcel Service Inc., or 50% of its holdings in the global delivery company.

Additionally, KIC sold 565,715 shares in The Walt Disney Company, which accounted for 31% of its holdings in the entertainment media giant. The Korean sovereign wealth fund also disposed of 230,000 shares in Meta Platforms Inc., the operator of Facebook.

Investing only in overseas assets, KIC is the world's 14th-largest sovereign wealth fund. It allocates 17.5% of AUM to alternative assets as of the end-2021 and aims to increase the proportion to 25% by 2025.

It invests 6% and 7% of its AUM in real estate & infrastructure and private equity, respectively. During his interview in January, the CEO said KIC will increase private equity and venture investment in tech, healthcare, telecom infrastructure and environmental, social and governance sectors.

Write to Sul-Gi Lee at surugi@hankyung.com
Jihyun Kim edited this article.