Jin Seung-ho, KIC President, "Aiming to Become One of the World's Top 10 Sovereign Wealth Funds... Supporting the Training of Domestic Global Financial Experts" (Comprehensive)

[Asia Economy Reporter Ji-hwan Park] Jin Seung-ho, President of Korea Investment Corporation (KIC), expressed his ambition to "make KIC one of the world's top 10 sovereign wealth funds." Along with expanding the application of ESG (Environmental, Social, and Governance) principles, he also revealed plans to contribute to the development of the domestic financial industry by fostering global financial professionals through the establishment of an International Finance Academy.

At a press conference held on the 1st at KIC headquarters in Jung-gu, Seoul, President Jin emphasized, "We aim to secure an asset management scale that can compete on equal footing with major sovereign wealth funds worldwide," adding, "We will review the policy weightings of current asset classes and enhance returns through active long-term and diversified investments."

Founded in 2005, KIC celebrated its 16th anniversary on this day. As of the end of last year, KIC's assets under management reached $183.1 billion (approximately 207 trillion KRW). Since starting with $1 billion (about 1 trillion KRW) in assets under management in 2006, the scale has grown more than 200 times over 15 years. It is expected that the asset size will soon surpass $200 billion (approximately 227 trillion KRW). Currently, KIC ranks among the world's top 15 sovereign wealth funds.

President Jin introduced four major development strategies for KIC to become one of the world's top 10 sovereign wealth funds. These four strategies are: △ leap to the world's top 10 sovereign wealth funds △ expansion of alternative investments △ strengthening responsible investments △ and expanding support for the development of the domestic financial industry.

He stressed, "We will actively respond to the changing investment environment after the COVID-19 pandemic by strengthening investment expertise based on future technologies and enhancing overseas local-focused investments to proactively respond to changes in the global financial market." To this end, KIC plans to actively increase the proportion of alternative investments. The plan is to gradually expand the share of alternative investments to improve the overall portfolio efficiency by enhancing long-term expected returns and diversifying risks. As of May this year, the alternative investment ratio stands at about 16%, and it is planned to be raised to 21% by 2024. By 2027, the alternative investment ratio will be expanded to 25%.

President Jin said, "We will gradually increase the proportion of alternative investments to improve the overall portfolio efficiency through long-term return enhancement and risk diversification," adding, "We will actively promote future technology investments based on the Fourth Industrial Revolution, including expanding venture and technology investments in the western North American region centered on the San Francisco office opened this year."

He also hinted at expanding ESG application. KIC plans to continuously refine the ESG integration system that considers ESG factors throughout the investment decision-making process for all entrusted assets, diversify ESG investment strategies, and expand investments in ESG funds.

He indicated that KIC will play a leading role in the development of the domestic financial industry as a sovereign wealth fund. President Jin believes that KIC must strengthen responsible investments in line with its status and responsibilities as a sovereign wealth fund and act as a leading partner in the domestic financial industry by demonstrating overseas investment leadership. To contribute to the development of the financial industry, KIC also plans to focus on nurturing global financial professionals through the establishment of the 'International Finance Academy.'

President Jin stated, "KIC has adopted ethical and transparent management as its fundamental management principle and has worked to raise the ethical awareness of all employees," adding, "We will continue to manage assets transparently with honesty and sincerity based on the heavy responsibility of increasing national wealth."

When asked about asset management performance in the first half of the year, President Jin said, "Although the returns are not as good as in 2019-2020, since the economy and corporate earnings have improved significantly, I think the financial market itself is relatively prosperous," adding, "While steady performance is being achieved in stocks, returns in bonds have been poor due to concerns about inflation."

Regarding the possibility of investing in cryptocurrencies, he said, "As a sovereign wealth fund responsible for the government's foreign exchange reserves, we pursue stable investments compared to general companies," and added, "It is still premature for sovereign wealth funds to invest in virtual assets such as Bitcoin."

Regarding recent remarks by Lee Dong-geol, Chairman of the Korea Development Bank, about incorporating KIC as a subsidiary, President Jin said, "It is difficult for us to accept incorporation as a subsidiary, but we understand the intention behind Chairman Lee's remarks," adding, "We will look for ways to assist Korean companies when they invest overseas."