Korean sovereign wealth fund takes W23.7tr in investment return

Korea Investment Corporation, a sovereign wealth fund owned by the South Korean government, said Tuesday that it earned 23.7 trillion won ($21.8 billion) from investment last year despite the ongoing coronavirus pandemic.

The whopping 23.7 trillion-won profit amounts to 4.6 percent of the government’s budget last year, standing at 513 trillion won, and 1.8 times higher than the amount of corporate tax tech giant Samsung Electronics paid in 2019, at 13.2 trillion won. The KCI’s return on investment is also larger than 17.6 trillion won of corporate taxes paid by the nation’s five largest companies by revenue in 2019, including Samsung, Hyundai Motor Group, and SK hynix.

Over the course of two years from 2019 to 2020, it recorded a 60 percent profit rate by making $42 billion in return on investment.

Along with the profit growth, the fund operator’s assets under management nearly doubled from $91.8 billion in 2015 to $183.1 billion in 2020.

“KIC was able to achieve outstanding results in stock and bond investment via asset allocation and portfolio rebalancing,” said Choi Hee-nam, chief executive of the sovereign wealth fund, citing the government’s measures to improve market liquidity which boosted both the stock and bond markets.

Of all KIC’s assets, stocks accounted for 42.7 percent while bonds and alternatives took up 35.2 percent and 15.3 percent, respectively.

The KIC chief vowed that the organization will bolster its investments in the environment, while reviewing measures to cut investments in coal.

By Kim Young-won (wone0102@heraldcorp.com)