Korean sovereign fund KIC appoints new CIO
Korea Investment Corporation (KIC) has appointed Heung-Sik Choo, formerly director general at Bank of Korea’s reserve management group, as its new CIO. He replaces Dong-Ik Lee, who resigned in January.
Choo - whose appointment was reported by domestic media yesterday - oversaw increased diversification in South Korea's $330 billion in foreign exchange holdings.
The central bank gradually trimmed its government bond exposure in favor of equity and corporate fixed income instruments, while also easing its reliance on US dollar-denominated assets and entering new geographies, including emerging markets.
Choo started his career at Bank of Korea in 1982, rising to CIO before being named head of the reserve management group in November 2011. He also spent a brief period at the World Bank.
Lee, who was previously head of investments at STIC Investments, was appointed to a three-year term as CIO of KIC in 2012, becoming the first Korean national to get the job. His departure came shortly after the resignation of the sovereign wealth fund's president and CEO, Chong-Suk Choi.
Lee served as interim CEO while KIC lined up Hong-Chul Ahn as a permanent replacement. On Lee's resignation Kee-Hong Rhee filled in as interim CIO and has now taken up the role of head of KIC's research center.
KIC, which was established in 2005, had $56.6 billion under management at year-end 2012. Of this, 6.1% was deployed in alternative assets, 3.2% in special investments and 90.7% in traditional assets, including bonds, commodities, cash and equities. The $3.5 billion alternative assets portfolio is 31.4% private equity, 26.3% real estate, 38.5% hedge funds and 3.8% cash.
At the end of 2012, KIC's private equity investments had a net asset value of $1.01 billion and had delivered an annualized return of 10.80% since the program started in September 2009.
Lee told Bloomberg last year that KIC is planning to triple its alternative assets allocation to as much as 20% by 2016, spending $5-10 billion over the next three years.
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