Korea's KIC targets 50% alternatives allocation

Hongchul Ahn, CEO of KIC, outlined the goal in an address marking the 10th anniversary of the sovereign wealth fund's formation. He drew comparisons to the approaches taken by Yale University and other US endowments as well as pension funds such as a Canada Pension Plan Investment Board (CPPIB).

"We truly have a long way to go and it is a daunting goal, given that our assets under management keep rising so fast. Still, we will not be intimidated at all and we plan to increase the portion of alternative assets to 15% by year-end," Ahn added.

As of year-end 2014, KIC had $84.7 billion in assets, of which $6.8 billion was deployed in alternatives. The fund had $3.2 billion in private equity, $1.9 billion in hedge funds and $1.5 billion in real estate. The private equity portfolio has grown from $2.6 billion in 2013 and $1.08 billion in 2012.

The private equity return - in US dollar terms - since it began investing in the asset class in 2009 is 6.99%, and 8.3% for alternatives as a whole. KIC's five-year overall annualized return is 7.4% and annualized returns since inception stand at 4.1%. It also outperformed the government-set benchmark last year to generate a return of 10.03%.

Set up in 2005, KIC initially bought bonds before adding equities to its portfolio in 2007. Two years later, it expanded into distressed debt, real estate and private equity.

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• Topics
• LPs
• Fundraising
• North Asia
• KIC
• Fundraising
• LPs
• South Korea