KIC boosts hedge fund investing with Seoul Guarantee Insurance

Korea Investment Corporation (KIC) signed an agreement on Feb. 24 with Seoul Guarantee Insurance Company (SGI) to co-invest in overseas hedge funds, the South Korean sovereign wealth fund said on Thursday.

Under the agreement, SGI and Korea's Tongyang Life Insurance Co. will jointly invest $20 million in KIC’s $300 million joint venture. The JV was established last November by KIC, Korea’s National Agricultural Cooperative Federation (NongHyup) and the National Federation of Fisheries Cooperatives (Suhyup). The sovereign wealth fund, NongHyup and Suhyup respectively injected $150 million, $100 million and $50 million in the JV. SGI, the largest guarantee insurer in Korea with a 420 trillion won ($349.1 billion) guarantee supply, has joined the investors via the $20 million injection.

The JV started investing in hedge funds in February and plans for additional investments, KIC stated. The partnership with SGI will create synergy effects in various asset classes, KIC’s Chief Executive Jin Seoungho said.

KIC, the world’s 14th-largest sovereign wealth fund, is managing $205 billion in assets as of the end-2021 and invests wholly in overseas assets. Alternative investment makes up 17.5% of its AUM, including 7% for private equity and 6% for real estate & infrastructure.

The sovereign wealth fund will increase private equity and venture investment in the tech sector such as artificial intelligence, software and information securities and healthcare, the CEO said in an interview with The Korea Economic Daily in January. The sovereign wealth fund is considering investments in telecommunications infrastructure and environmental, social and governance (ESG) as remote work will continue globally, the CEO added. 

Write to Chang Jae Yoo at yoocool@hankyung.com
Jihyun Kim edited this article.