South Korea's sovereign wealth fund will start increasing its exposure to illiquid alternative assets in an effort to expand its long-term investment portfolio, a senior fund official said Wednesday.
"Korea Investment Corp. will nearly triple allocations to alternatives as we are at the early stage of a four- to five-year positive cycle for distressed allocations," Scott Kalb, chief investment officer at the Seoul-based firm, said during the annual Asian Investment Summit in Hong Kong.
Alternative assets refer to those that are less liquid than traditional investments. They include real estate, credit and private equity. Investors considering alternative assets are generally investing far into the future.
"As transactions (of alternative assets) done at the top of the market in 2005-2007 face debt maturity in coming years, restructuring and recapitalization needs are going to be huge," Kalb said.
Korea Investment, established by the South Korean government in 2005, manages some of the country's foreign reserves, specializing in overseas investments.
As of 2009, the company had invested 49 percent of its available funds in fixed-income products, 41 percent in public equities and the remaining 10 percent in real assets and other alternative investments, Kalb said.
The company initially received US$17 billion of foreign exchange reserves from the Bank of Korea and an additional $3 billion of foreign exchange stabilization funds from the South Korean Ministry of Finance.//Yonhap
"Korea Investment Corp. will nearly triple allocations to alternatives as we are at the early stage of a four- to five-year positive cycle for distressed allocations," Scott Kalb, chief investment officer at the Seoul-based firm, said during the annual Asian Investment Summit in Hong Kong.
Alternative assets refer to those that are less liquid than traditional investments. They include real estate, credit and private equity. Investors considering alternative assets are generally investing far into the future.
"As transactions (of alternative assets) done at the top of the market in 2005-2007 face debt maturity in coming years, restructuring and recapitalization needs are going to be huge," Kalb said.
Korea Investment, established by the South Korean government in 2005, manages some of the country's foreign reserves, specializing in overseas investments.
As of 2009, the company had invested 49 percent of its available funds in fixed-income products, 41 percent in public equities and the remaining 10 percent in real assets and other alternative investments, Kalb said.
The company initially received US$17 billion of foreign exchange reserves from the Bank of Korea and an additional $3 billion of foreign exchange stabilization funds from the South Korean Ministry of Finance.//Yonhap
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