'Top Priority Goal: Achieving Stable Operational Performance'
High Investment Expertise and Insight Are Essential Factors
Park Il-young, the newly appointed President of Korea Investment Corporation (KIC), stated in his inaugural speech on the 26th, "We must take a step further from the vision of being a 'trusted world-leading investment institution' to grow into a sovereign wealth fund that enhances national prestige and contributes to society through smart investments."
Born in 1968, President Park graduated from Seoul National University with a degree in International Economics and from Duke University in the United States with a degree in Public Policy from the Sanford School of Public Policy. After passing the 36th Administrative Examination in 1993, he served as Director General of the Development Finance Bureau, Director General of the External Economic Bureau, and International Economic Management Officer at the Ministry of Strategy and Finance.
He is also recognized as an international finance expert with extensive experience and a broad network in international organizations, having worked as an economist and executive director at the World Bank and as a senior advisor at the International Monetary Fund (IMF).
President Park emphasized, "The top priority is to achieve stable operational performance," adding, "Agile market responsiveness based on high investment expertise and insight, along with a flexible organization and system that can actively absorb changes and take on challenges, are essential elements for sustaining stable long-term performance in the rapidly changing global financial market."
He further added, "Ultimately, we must become a model sovereign wealth fund that drives the virtuous cycle of not only the national economy but also the global economy."
Below is the full text of the inaugural speech by Park Il-young, the new President of KIC.
Dear KIC employees, I am pleased to meet you today as the 9th President of Korea Investment Corporation. First, I sincerely express my respect and gratitude to former President Jin Seung-ho and all employees at the Seoul headquarters and overseas offices who have dedicated themselves to the growth and development of KIC to date. After more than 30 years of service in the government and international organizations, I am honored to be appointed as the President of KIC, representing the Republic of Korea in the global financial market as a sovereign wealth fund. However, at the same time, I am deeply aware of the responsibilities and expectations placed upon me, which makes my shoulders feel very heavy today. Especially as KIC approaches its 20th anniversary, it is a time to redefine its long-term vision and make a greater leap forward, which adds to the weight of responsibility I feel today.
Since its establishment in 2005, KIC has grown into a sovereign wealth fund managing assets worth $200 billion, maintaining stable long-term performance despite global financial crises, the COVID-19 pandemic, and repeated geopolitical crises, thanks to the wise leadership of former presidents and the dedicated efforts of all employees.
Now, KIC must take a step further from the vision of being a 'trusted world-leading investment institution' to grow into a sovereign wealth fund that enhances national prestige and contributes to society through smart investments. To achieve this, the foremost goal must be to generate stable operational performance. Agile market responsiveness based on high investment expertise and insight, along with a flexible organization and system that can actively absorb changes and take on challenges, are essential elements for sustaining stable long-term performance in the rapidly changing global financial market. Domestically, KIC should contribute to the development of the Korean financial industry, and internationally, it should take a leading role in overcoming global challenges and risks, ultimately becoming a model sovereign wealth fund that drives the virtuous cycle of both the national and global economies.
I will trust the employees of KIC, who possess the world's best expertise and passion, and will always communicate closely with you, striving as one team to achieve the best results at every moment as KIC moves toward a higher vision. Dear KIC employees! Upon being appointed as KIC President and contemplating the future direction of KIC, I have reconsidered the upcoming global investment environment.
In the short term, inflationary pressures are easing, and with the U.S. Federal Reserve (Fed) concluding its tightening monetary policy cycle, the pace of future interest rate cuts and economic growth trends will be major factors causing significant market volatility. Despite the start of interest rate cuts, the high inflation and high interest rate environment is expected to persist for some time, making the investment environment challenging for institutional investors.
Geopolitical uncertainties such as the U.S.-China conflict, the Russia-Ukraine and Israel-Hamas wars, and tensions in the Middle East remain major crisis factors that could cause widespread and significant shocks to financial markets and the economy. Additionally, new technological innovations triggered by AI are leading a paradigm shift across industries once again, following economic growth driven by global trade expansion in the 1970s and 1980s and the internet era in the early 2000s. This massive industrial structural transformation is a driver of economic growth and creates promising long-term investment opportunities. However, without clear analysis and accurate forecasting, future profit opportunities will inevitably be lost. Considering these external conditions, the investment environment is by no means easy.
However, keeping in mind that KIC is a long-term investor, I believe that by focusing on strengthening the following four core competencies with a broad perspective and long-term view, KIC can continue to grow and develop as a sovereign wealth fund.
First, enhancing stable returns. As mentioned earlier, as a sovereign wealth fund entrusted with managing national assets, the top priority must be to generate stable returns over the long term from a financial perspective. We must focus on securing medium- to short-term returns as well as long-term returns through portfolio diversification by discovering new asset classes and advancing asset allocation models with flexible management between traditional and alternative assets.
Furthermore, we should actively explore investment opportunities in emerging markets and expand investment regions to secure a leading position in the investment markets of new growth countries over the long term. Of course, strengthening risk management capabilities is an essential element for stable return generation during the process of expanding investments and diversifying portfolios. It is necessary to more closely examine risks for each asset, such as return trends by sector and asset class and changes in management proportions, and to strengthen systematic risk management systems from the perspective of the overall portfolio.
Second, strengthening investment expertise. We must enhance research capabilities and increase the linkage between research and investment to promptly utilize in-depth analysis of global macroeconomics, financial market trends, and future industrial changes in investment strategy formulation and execution. We should improve analysis and understanding of detailed sectors within each investment asset and actively utilize overseas local bases such as New York and London to strengthen regional investment expertise and discover excellent investment opportunities in both the short and long term.
Strengthening internal research and investment capabilities will lead to gradual expansion of direct investments in the future, resulting in cost savings such as fees and enabling KIC to fulfill its role and function as a sovereign wealth fund. Additionally, enhancing expertise in responsible investment is also a key task. Currently, leading global institutional investors are advancing responsible investment standards and strategies with a balanced perspective between fiduciary duty and long-term profitability, actively pioneering ESG investment areas. KIC should not only participate in international efforts for sustainable social and economic development, such as climate change response and corporate governance improvement, but also rise as a best standards institution for responsible investment in Korea and the global financial market.
Third, building an efficient organization. Dear employees, you are KIC's greatest asset. In leading KIC's development, I will focus on investing in your growth, our core asset, and establishing efficient work systems. I will carefully manage everything from recruitment to growth and long-term retention, including performance-based rewards, career development opportunities tailored to individual expertise, transparent and fair personnel systems, and resolution of grievances. Furthermore, I will establish transparent and efficient decision-making and work systems. Investment decisions must be made carefully according to strict standards and procedures, and it is important that decisions are executed promptly without unnecessary delays to achieve results. We will also strengthen KIC's people-centered management policies, including human rights management and ethical management.
Fourth, strengthening domestic and international partnerships. Currently, countries around the world are actively expanding platforms for more practical cooperation by sharing knowledge and values beyond capital and investment partnerships. Ignoring the rising expectations and standards in the rapidly changing and complex global financial market will prevent KIC from becoming a trusted international investment institution. KIC must swiftly respond to changing international norms and build strategic networks with leading global institutions, expanding the scope and range of cooperation to include global sovereign wealth funds, asset management institutions, and development finance institutions in the mid to long term. Additionally, cooperation conditions with domestic institutions have matured significantly compared to the past. I believe that trust and support from the public and domestic institutions will be a crucial foundation for enhancing KIC's status and activities as a sovereign wealth fund.
We aim to further develop ongoing projects such as co-investment when domestic companies expand overseas, expanding mandates to domestic asset managers, and increasing loans using overseas branches of domestic banks. Dear KIC employees!
Since its establishment 20 years ago, KIC has pioneered Korea's first path in every aspect. Although I am inaugurated as the 9th President, KIC, approaching its 20th anniversary, stands at a new starting line with a mindset to pioneer another first path toward a higher vision together with you. Let us all, you and I, with a sense of mission and pride in creating the growth trajectory of Korea's only sovereign wealth fund, work together. Thank you.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
