Korea Investment Corporation (KIC) has opened an office in Singapore, as the $122 billion sovereign wealth fund continues to expand its alternative investments beyond its east Asian home base.
KIC will manage assets locally through the Singapore office, while building a network for deal sourcing in southeast Asia, India and Oceania, the Seoul-based fund manager announced. The company held the opening ceremony for the new office in Asia Square Tower 1 last Friday.
The Korean fund is opening in Singapore to enhance its ability to hunt for opportunities in the region, conduct feasibility studies for each investment and perform on-site inspections. “The new branch is expected to not only improve KIC’s overall returns through local asset management, but also facilitate co-investment with major institutional investors and global asset managers,” the firm said in its statement.
Singapore Branch To Support KIC’s Real Estate, Infrastructure Plays
KIC’s new address in the office tower in Singapore’s Marina Bay marks the company’s third overseas branch, after landing in New York in 2010 and opening in London the following year. The fund manager was first reported to be eyeing a Singapore base in June, as part of a strategy to boost its exposure to alternative assets including real estate and infrastructure.
KIC raised its allocation to alternative assets to 13.7 percent ($15.7 billion) as of the end of 2016, up from 12.4 percent the previous year, and plans to increase the ratio to as much as 20 percent by 2020.
“By opening our Singapore office, we aim to gain a competitive edge in alternative investment in Southeast Asia and Oceania,” KIC’s Chief Investment Officer Kang Shin-woo told The Korea Times last week. “To that end, we plan to gradually increase our investment in alternative assets that enable higher long-term returns and lower risks through portfolio diversification.”
Sovereign Wealth Fund Hunts for Asian Property
Kang said KIC was especially interested in infrastructure investment in Australia, where the government earlier this year unveiled a plan to spend $56 billion on infrastructure projects from high-speed rail to a new airport in Sydney.
KIC is said to have led a consortium to buy the InterContinental Hong Kong for $940 million in October 2015, linking up with Hong Kong private equity shop Gaw Capital Partners for the acquisition of the five-star hotel. In another Asia Pacific real estate play, KIC was reported to be part of a group that was buying a 50 percent stake in the Southgate office complex in Melbourne for A$289 million ($377.5 million) in August of last year.
Set up in 2005 to manage assets entrusted by the Korean government, public funds and the Bank of Korea, KIC reported an 8.17 percent return in the first half of 2017. The company has $122.3 billion in assets under management, according to the Sovereign Wealth Fund Institute.