S.Korea’s sovereign wealth fund to strengthen different investment decision allocation

SEOUL, July 1 (Reuters) – Korea Investment decision Corp (KIC), South Korea’s sovereign wealth fund, reported on Thursday it plans to increase the allocation for option investments – like serious estate, personal equity and hedge cash – to 25% by 2027, up from 16% as of Could.

It also plans to modify its portfolio to mirror considerations about inflation and extensive-term bond yields soaring, and anticipations for lessened liquidity.

“Alternative investments lifted an annual return level of all around two to a few p.c, which is rather substantial, and as a result we program to increase the allocation of that,” stated Jin Seoung-ho, the recently appointed chairman of KIC, in a news conference.

“We also plan to regulate the allocation of traditional belongings like shares and bonds, presented fears about inflation and bond yields soaring,” he added.

As of stop of 2020, allocation of shares, bonds and alternative assets stood at 42.7%, 35.2% and 15.3%, respectively.

KIC, founded in 2005, manages funds entrusted by the federal government and central financial institution and invests entirely exterior South Korea.

The wealth fund, which operates a complete $183.1 billion as of conclude of 2020, currently manages far more than $82.1 billion of the finance ministry’s overseas exchange stabilisation cash and $30 billion of the Bank of Korea’s foreign exchange reserves. (Reporting by Joori Roh Enhancing by Simon Cameron-Moore)