Mon, September 10, 2012

S.Korea's sovereign wealth fund to lift investment in private market

2012-09-10 06:44:37 GMT2012-09-10 14:44:37(Beijing Time)  Xinhua English

SEOUL, Sept. 10 (Xinhua) -- Head of Korea Investment Company ( KIC), South Korea's sovereign wealth fund, said last week that the fund planned to lift its investment into the private market, while watching for opportunities to invest in bad assets in advanced nations, a press release by the fund showed Monday.

"Opportunity to invest in bad assets is given as advanced economies become distressed. KIC plans to increase investment into the private market such as the real estate market and the strategic investment field," KIC's chief executive Choi Chong-suk was quoted as saying at the International Forum of Sovereign Wealth Fund (IFSWF) held in Mexico City for three days last Friday.

Choi cautioned that the global investment conditions were in bad shape due to the low rate of investment return, but the head noted the strategy to widen investment into emerging markets would boost investment returns and asset diversification as emerging economies were expected to continue a high growth rate from a mid- to long-term perspective.

The KIC was established in 2005 to manage part of South Korea' s foreign reserves entrusted by the Bank of Korea (BOK) and the finance ministry's foreign exchange stabilization funds. The sovereign wealth fund was reported to yield a minus 3.3 percent in 2011 due to losses in equity investment.

In early 2008, the KIC invested around 2 billion U.S. dollars in Merrill Lynch, but it suffered huge losses from the equity investment due to the global financial crisis. Merrill Lynch was later acquired by Bank of America (BOA).


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