Hyunseung Lee of KB Asset Management, Alternative Investments "Growing Rapidly"

Since CEO Lee Hyun-seung's Appointment
KB Asset Management's Alternative Investment Scale Doubles Growth

[Asia Economy Reporter Hwang Junho] The scale of alternative investment assets managed by KB Asset Management has doubled since CEO Lee Hyun-seung took office. Notably, the company succeeded in continuously attracting funds in the overseas infrastructure sector even during the COVID-19 pandemic.

As of the 17th, KB Asset Management announced that the scale of alternative investment assets stands at KRW 16.1489 trillion. At the time of CEO Lee's appointment in 2017, it was about KRW 8 trillion, marking approximately a twofold growth. Alternative investments refer to investment methods that invest in real assets such as infrastructure, real estate, corporate investments, and PDF (Private Debt Fund).

Most of these funds were raised through infrastructure investments. They led the attraction of KRW 10.4 trillion in renewable energy such as power generation projects, SOC, solar power, as well as North American power plants and Peru transmission facilities. Real estate investment also increased to KRW 3.7 trillion, including HiteJinro Seocho headquarters, office buildings in the United States, and Yeouido Finance Tower. Corporate investment reached KRW 1.8 trillion, including KRW 200 billion in new domestic corporate investments.

In particular, the expansion of overseas infrastructure investment stands out. Of the KRW 5.83 trillion in overseas investments, KRW 3.2 trillion was concentrated in infrastructure. At the time of CEO Lee's appointment, overseas investments were only KRW 1.0189 trillion, and infrastructure investments were just KRW 804.3 billion.

CEO Lee has been pioneering overseas markets together with AMP Capital, Australia's leading asset management company, as demand for infrastructure funds increases due to aging populations and growing public sector fiscal deficits. AMP Capital is one of the world's top three global infrastructure alternative fund managers, alongside BlackRock and EIG. Its assets under management reached KRW 213 trillion at the end of 2020.

Since last year, KB Asset Management has invested KRW 220 billion in U.S. infrastructure funds, KRW 220 billion in European infrastructure funds, and KRW 45 billion in senior loans for Canadian power plants. It also invested KRW 90 billion in senior loans for Australian public-private partnership (PPP) projects and UK optical communications within its own blind fund. Due to this extensive overseas alternative investment, the 'Global Infrastructure Fund' managed jointly by KB Asset Management and Australia's AMP Capital recently surpassed KRW 1 trillion in assets under management (with cumulative investments of KRW 2 trillion). This is a remarkable achievement amid a market contraction caused by increased difficulties in due diligence on investment targets due to COVID-19.

CEO Lee plans to further expand overseas territories in the second half of this year. Kim Hyung-yoon, Head of Infrastructure Operations at KB Asset Management, said, "In the second half, in addition to AMP Capital, we plan to establish new renewable energy funds, subordinated loans, and equity funds related to infrastructure in cooperation with various overseas asset managers in Australia and Europe."