South Korea’s sole sovereign wealth fund Korea Investment Corp. said Thursday that it has teamed up with two Korean institutional investors to deploy a combined $300 million for co-investment with non-Korean hedge funds in a bid to increase foreign alternatives exposure.
Under the plan, the three entities -- KIC, National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives -- will create a joint venture before the end of 2021 and start their first co-investment with a foreign hedge fund in January 2022.
KIC, NACF and NFFC are to deploy $150 million, $100 million and $50 million, respectively.
The joint venture announcement is the latest development since the three institutions signed a memorandum of understanding for foreign investment.
KIC said the new joint venture will lay the groundwork for the sovereign wealth fund’s further co-investment in overseas alternative assets with domestic institutional investors. It added that details about the co-investment procedure, portfolio and mechanism are under review among the participating institutions.
“The collaboration will allow us to share co-investment opportunities and reduce commission fees,” KIC Chief Executive Officer Jin Seung-ho said in a statement.
“We chose to lay out an investment structure to co-invest with hedge funds on account of its scalability, under which domestic institutional investors are able to jump in.”
The KIC was managing $183.1 billion in dollar-denominated assets entrusted by the Bank of Korea and the Ministry of Economy and Finance as of 2020. Its alternative exposure stood at 16.1 percent as of May.
