KIC mulls expanding assets in Asian emerging markets: CEO

NEW YORK – Sovereign wealth fund Korea Investment Corporation (KIC) is considering expanding alternative investments in Asian emerging markets, Chief Executive Jin Seoungho said at a meeting with journalists in New York earlier this week.  

“KIC is paying attention to the high potential in some Asian countries. With currency hedging strategies, we are particularly interested in India, Vietnam, Indonesia and other fast-growing economies in the region,” Jin said.

The South Korean institutional investor is also eyeing data centers and tech infrastructure in Japan, the world’s third-largest economy with a highly attractive market, the CEO added.

Meanwhile, KIC will take a cautious approach to US public equity investment this year.

“Market uncertainty is growing – the US financiers I met over the past few days forecast that the S&P 500 index will move between 3,200 and 4,800 this year. A big shock could come from anywhere due to rising rates,” he said. 

The CEO added that he is basically optimistic on US tech firms in the mid to long term as they are driving global industries' growth.

He also noted the recent US banking crises won’t heavily impact KIC’s global commercial real estate as the assets make up less than 10% of its entire portfolio. Even if an asset were to get hurt, it would only impact overall annual returns by 5 to 10 basis points across the entire portfolio, Jin said.

During the remainder of his trip, Jin will meet Blackstone CEO Stephen Schwarzman and Evercore ISI Chairman Ed Hyman, as well as attend the Milken Institute Global Conference.

KIC wholly invests in overseas assets. It was managing $169.3 billion in assets as of end-2022, with more than 20% of its funds allocated to alternative investments such as private equity, private debt, real estate and infrastructure. The CEO is aiming to raise the alternative investment percentage to 25% by 2025.

The sovereign wealth fund saw the largest annual loss last year since its inception in 2005. It posted a record shortfall of $29.7 billion in 2022 due to the poor performance of public equities and bonds. The annualized return was negative 14.4%, the worst percentage since 2008.

Write to Hyun-Suk Kim at realist@hankyung.com

Jihyun Kim edited this article.