중앙데일리

Deals pave way for KIC’s return

June 20,2009
After years of being criticized for its inactivity, the Korea Investment Corporation is starting to move to resume overseas investment.

The KIC, Korea’s sovereign wealth fund, said yesterday that it signed two memoranda of understanding with foreign firms this week to increase investment opportunities worldwide. On Wednesday, the fund inked a deal with Australia’s QIC followed by another the next day with Malaysia’s Khazanah Nasional Berhad.

“Since last year, during this present global economic crisis, the role of sovereign wealth funds as a key supplier of capital in the global financial market has become that much more important,” said Chin Young-wook, head of the KIC.

The MOUs will grant Korea more opportunities to engage in joint investment with the respective countries - either bilateral investments or joint investments in a third country.

According to local media, the government is planning to invest an extra $3 billion in the KIC, adding to the $25 billion in national assets, including foreign exchange reserves, that the group manages currently.

“As far as I know, it is true that the government has put in an extra $3 billion,” said an official at the KIC yesterday who declined to be named.

Of that $3 billion, the KIC is expected to invest $1 billion in “alternative investments,” or investment products including private equity and real estate rather than traditional investments such as stocks or bonds.

The KIC has been especially cautious of overseas commitments after it suffered huge losses on a $2 billion investment in U.S. bank Merrill Lynch, which was taken over by Bank of America last September after being on the verge of collapse.

IAfter years of being criticized for its inactivity, the Korea Investment Corporation is starting to move to resume overseas investment.

The KIC, Korea’s sovereign wealth fund, said yesterday that it signed two memoranda of understanding with foreign firms this week to increase investment opportunities worldwide. On Wednesday, the fund inked a deal with Australia’s QIC followed by another the next day with Malaysia’s Khazanah Nasional Berhad.

“Since last year, during this present global economic crisis, the role of sovereign wealth funds as a key supplier of capital in the global financial market has become that much more important,” said Chin Young-wook, head of the KIC.

The MOUs will grant Korea more opportunities to engage in joint investment with the respective countries - either bilateral investments or joint investments in a third country.

According to local media, the government is planning to invest an extra $3 billion in the KIC, adding to the $25 billion in national assets, including foreign exchange reserves, that the group manages currently.

“As far as I know, it is true that the government has put in an extra $3 billion,” said an official at the KIC yesterday who declined to be named.

Of that $3 billion, the KIC is expected to invest $1 billion in “alternative investments,” or investment products including private equity and real estate rather than traditional investments such as stocks or bonds.

The KIC has been especially cautious of overseas commitments after it suffered huge losses on a $2 billion investment in U.S. bank Merrill Lynch, which was taken over by Bank of America last September after being on the verge of collapse.

If the government has in fact injected additional money into the fund, it would mark the first time it has allowed the KIC to invest in anything other than stocks or bonds since the Merrill Lynch incident.


By Cho Jae-eun [jainnie@joongang.co.kr]



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