Korea Investment Corporation (KIC) is working on expanding its overseas presence with new representations in key locations, as well as plans to increase its alternatives exposure.
Local Korean media reports that KIC has started the process to open an office in Mumbai, the financial and commercial hub in the world’s soon-to-be most populous country. However, an official at KIC told AsianInvestor that “the discussion” about where the sovereign wealth fund will establish the next overseas office is still in the early stages.
“KIC has not reached a decision on where the location for its fifth overseas office will be. India is among various regions being considered,” the KIC official said.
As of end-2022, KIC’s assets under management (AUM) totalled $169.3 billion, according to a statement by Korea's Ministry of Economy and Finance at the National Assembly on February 21.
KIC distinguishes between offices and branches overseas. Initially, representation is considered as a branch, which can then expand into an office, the KIC official explained.
As such, KIC currently has overseas offices in New York, London, and Singapore. Meanwhile, it considers its presence in San Francisco as a branch that caters to the nearby tech hub of Silicon Valley. The San Francisco branch opened as recently as March 2021.
The consideration of establishing an additional overseas office comes amid a gradual expansion of alternative investments. This in turn is based on KIC's plan to further expand alternative assets going forward: the target is 26% of the total portfolio invested in alternative assets by 2025. By end-2022, the share was 22.8%.
“KIC understands that an extended localisation strategy brings substantial benefits to alternative asset investing — from sourcing a good deal to monitoring assets,” the official said.
A POPULAR LOCATION
If KIC decides to establish a presence in India, it will follow a number of global peers that have put boots on the ground in the subcontinent in recent years.
Most recently, the British Columbia Investment Management Corporation (BCI), the investment manager for the public sector of British Columbia province in Canada, told AsianInvestor that it had hired its first infrastructure-related expert in Mumbai in January.
Furthermore, Canada’s Ontario Teachers’ Pension Plan set up its Mumbai office in 2022. Singapore’s sovereign wealth fund GIC and Canada Pension Plan Investment Board (CPPIB) have run their Mumbai branches since 2011 and 2015, respectively.