KIC eyes direct lending with high return potential: CEO

Sovereign wealth fund Korea Investment Corporation (KIC) seeks opportunities in direct lending for companies that are not cyclically sensitive and generate high cash flow, CEO Jin Seoungho said during a keynote speech at The Korea Economic Daily’s alternative investment forum ASK 2024 on Tuesday.

The state-run fund will continue to invest in private debt, as the asset class — amid growing demand from mid-market companies — provides limited downside risk and equity-like returns.

KIC managed $189.4 billion in assets as of end-2023, about 22% of which was allocated to alternative investments. The state-owned fund invests solely in overseas assets.

In private equity, KIC focuses on market leaders that have steady cash flow and downside protection and sectors with long-term growth potential such as artificial intelligence tech and healthcare, the CEO added. 

He noted that the fund expects the secondary market, which can offer shorter durations and faster exits than the primary market, to be active amid investors’ demand for liquidity.

KIC also forecasts that data centers, logistics and multifamily housing will create investment opportunities and plans a regional diversification of its real estate portfolio, which is now focused on North America and Europe.

KIC’s Mumbai office, which opened in January as the fund’s first affiliate in emerging markets, will play a critical role in identifying targets in India, with its fast-growing and industrializing economy.    

The state-run fund maintains its plan to increase its proportion of alternative assets over the mid- to long term. The fund will reinforce its internal teams involved in direct investment while expanding co-investment with general partners that have excellent track records, the CEO said.

Write to Jihyun Kim at snowy@hankyung.com
Jennifer Nicholson-Breen edited this article.