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| Korea Investment Corp. (KIC) CEO Jin Seoung-ho speaks during a press conference at KIC headquarters in Seoul, Thursday. Courtesy of KIC |
Sovereign wealth fund doubtful about cryptocurrency investments
By Park Jae-hyuk
Korea Investment Corp. (KIC) CEO Jin Seoung-ho expressed his skepticism of a proposal from Rep. Park Yong-jin of the Democratic Party of Korea (DPK), one of the ruling party's presidential candidates, to establish a "Korean version of Temasek" by integrating the sovereign wealth fund and the National Pension Service (NPS) Investment Management.
"The kind of assets under our management and our investment targets are different from those of the NPS. It seems unfeasible at this moment," he said during a press conference held Thursday to celebrate his appointment to the job in May and the 16th anniversary of KIC. "We can consider joint investments and different kinds of cooperation with the NPS instead."
The CEO also refused an offer made by Korea Development Bank (KDB) Chairman Lee Dong-gull last month to make KIC one of the state-run bank's subsidiaries for future-oriented investments.
"I think his intention was to seek support from KIC for Korean companies' strategic investments overseas," Jin said. "We can discuss ways to help Korean firms when they make investments in other countries."
He also said KIC is not considering investing in cryptocurrencies including bitcoin, despite the recent trend of global institutional investors including virtual assets in their portfolios.
"Because we are a sovereign wealth fund managing the government's foreign currency reserves, we should pursue relatively stable investments compared to private companies," he said.
Aims to rank among leading sovereign wealth funds
During the press conference, the CEO outlined KIC's growth strategies to become one of the world's top 10 sovereign wealth funds.
"We will secure a sizable amount of assets to vie with major sovereign wealth funds worldwide," he said. "After checking our current asset portfolio, we will boost our profitability through aggressive long-term, diversified investments."
Founded in 2005 for the purposes of increasing the nation's sovereign wealth and contributing to the financial industry, KIC is currently the 15th-largest sovereign wealth fund globally in terms assets under management (AUM). As of the end of 2020, its AUM totaled $183.1 billion won.
Jin promised KIC will continue to increase the proportion of alternative investments for long-term profitability and risk diversification.
In particular, its San Francisco office that opened in March will play a key role in investments in promising startups there, which have technologies for robotics, healthcare, self-driving technology and new renewable energies, according to the CEO.
He noted that KIC will reinforce its overseas offices and build networks with various institutions around the world to cope with the changing market environment in the wake of the COVID-19 pandemic. He emphasized the necessity of using artificial intelligence, big data and experts in innovative technologies to manage KIC's assets.
Amid the growing importance of investments considering environmental, social and corporate governance (ESG) principles, the CEO vowed to make more efforts for socially responsible investments. KIC plans to introduce a new system during the second half of this year to measure the possible risks from carbon dependency and climate change.
In order to contribute to the nation's financial industry, the institution is also pushing ahead with establishing an international finance academy intended to foster and train global financial specialists.
"After adopting ethical and transparent management as our basic principle, we have tried hard to inspire all employees to have a sense of ethics," Jin said. "We will continue to manage our assets transparently."
