S.Korea’s sovereign fund KIC logs 8.5% return in 2024

The Korea Investment Corporation (KIC) reported an annual return of 8.49% last year thanks to steady gains from equity investments led by the AI tech stock rally and projected high market volatility this year amid lingering geopolitical and global economic uncertainties.

South Korea’s sole sovereign wealth fund announced Friday that its assets under management hit the fund's historic high of $206.5 billion as of December 31, 2024, with an annual investment return of 8.49%.

The return was lower than the prior year’s 11.6% gain.

Founded in 2005, KIC’s accumulated investment gains totaled $93.9 billion, with an annualized return of 4.75%, it added.

The main driver for the sovereign wealth fund’s investment gains for 2024 was an 18.83% profit from equity investments, more than offsetting a loss of 0.19% from fixed-income investments.

KIC’s annual investment return on traditional assets – equities and debts – stood at 9.30% last year, 3 basis points (bps) higher than the return on the benchmark index.  

“While high inflation and geopolitical news kept markets highly volatile, KIC achieved stable returns and remains resilient for the long term,” KIC Chief Executive Park Il Young said in a statement.

While forecasting geoeconomic uncertainties will continue this year due to intensifying global trade tensions, KIC will seek to unlock opportunities in “a well-diversified” portfolio of assets, especially in the areas related to artificial intelligence-driven innovation with “thorough risk management and timely investments,” he added.

ASSETS

The solid return on equity investments last year was largely owed to the strong global stock markets led by AI and technology sectors, defying inflation concerns, KIC said.

Fixed-income investments incurred a loss due to the volatile market condition caused by delayed rate cuts in key economies last year. Still, KIC managed to keep its return 2 bps higher than the benchmark index return, it said.

It also fared well in investment in alternative assets, posting an annualized return of 8.06% from 2018 to 2024. Investment in private equity recorded a gain of 12.20%, real estate and infrastructure 5.46%, and hedge funds 5.80% over the same period.

Its annualized return of alternative assets since 2009, when it began investing in alternative assets, stood at 7.68%.

As of the end of 2024, traditional assets made up 78.1% of KIC's total assets and alternative assets the remaining 21.9%.

The Korean sovereign wealth fund continued expanding its alternative investments in its portfolio, and its net alternative asset value increased $3.5 billion year over year to $45.2 billion in 2024.

Earlier this week, it met with Korean institutional investors and London-based asset managers in the UK capital to explore investment opportunities in Europe’s middle-market private equity sector.

KIC manages public funds entrusted by the government and the Bank of Korea, investing across diverse global asset classes.

It operates overseas offices in New York, San Francisco, London, Singapore and Mumbai.

Write to Sookyung Seo at skseo@hankyung.com

Jennifer Nicholson-Breen edited this article.