Sovereign wealth fund Korea Investment Corporation (KIC) seeks opportunities in direct lending for companies that are not cyclically sensitive and generate high cash flow, Chief Executive Jin Seoungho said during a keynote speech at The Korea Economic Daily’s alternative investment forum ASK 2024 on Tuesday.
The state-run fund of South Korea will continue to invest in private debt as the asset class, with rising demand from mid-market companies, provides limited downside risks and equity-like returns.
KIC managed $189.4 billion in assets as of the end of 2023, about 22% of which is allocated to alternative investments. The state-owned fund invests in overseas assets only.
On private equity, KIC focuses on market leaders that have steady cash flow and downside protection and sectors with long-term growth potential such as artificial intelligence tech and healthcare, the CEO added.
He noted that the fund expects the secondary market, which can offer shorter duration and faster exits than the primary market does, to be active amid investors’ demand for liquidity.
KIC also forecasts data centers, logistics and multifamily housing will create investment opportunities and plans regional diversification of its real estate portfolio, which is focused on North America and Europe.
KIC’s Mumbai office, which opened in January as the fund’s first affiliate in emerging markets, will play a critical role in identifying targets in India amid the country’s fast-growing economy and industrialization, he said.
The state-run fund maintains its plan to increase the proportion of alternative assets in mid-to-long term. The fund will strengthen its internal teams for direct investment while expanding co-investment with general partners that have great track records, the CEO said.
Write to Jihyun Kim at snowy@hankyung.com
Jennifer Nicholson-Breen edited this article.
