KIC forms $400 mn joint venture with NongHyup for private equity co-investment

Korea Investment Corporation (KIC) has announced a $400 million joint venture with NongHyup, or the National Agricultural Cooperative Federation, to invest in overseas private equity deals.

KIC and Nonghyup will invest $300 million and $100 million, respectively.

On July 13, both parties met to sign the agreement and to lay the groundwork such as discussing investment procedures for private equity deals, as well as investment targets and methods. They are aiming to make their first investment this year and in the meantime, both parties will engage in various cooperative measures such as reviewing investment proposals, exchanging opinions, and more.

“Through this partnership, we will be able to share opportunities for overseas private equity deals and boost returns through reduced fees,” said KIC chief executive Heenam Choi. “Going forward, KIC will actively share its global network and insight with domestic investors, and achieve higher yields to contribute to the financial industry," he stressed.

As reported earlier, KIC and NongHyup have been in works to set up a joint venture to boost local investors' deal sourcing capability for higher yields. They signed an MOU in May 2019.

Through this joint venture, NongHyup has become the first Korean institutional investor other than the four designated institutions to entrust capital with KIC.

Under the law, KIC is allowed to manage assets entrusted only by the finance ministry and the Bank of Korea, as well as the National Pension Service (NPS) and the Government Employees Pension Service (GEPS).

“Because of the law, we cannot help but decide to form a joint venture,” Choi had said earlier.

The finance ministry and the Bank of Korea have entrusted a combined $100 billion to KIC, which has grown to $157.3 billion as of the end of last year. Alternatives account for 15.6%, or $25 billion.

KIC aims to more than double its assets under management to $400 billion by 2035.  NongHyup manages 305 trillion won ($254 billion) in assets.

Meanwhile, James Kim was installed as KIC’s deputy CIO and head of alternative investment on July 1.

Write to Seonpyo Hong at rickey@hankyung.com