Korea’s $57 billion sovereign wealth fund, the Korea Investment Corporation, has lost its president and chief executive Chong-suk Choi after he resigned from the organisation for personal reasons, a source close to the matter confirmed to Private Equity International.
The SWF will now search for a replacement, with Dong-ik Lee, current chief investment officer at KIC, taking over Choi’s duties in the interim. Lee, who is to act as interim chief executive in the meantime, replaced Scott Kalb as chief investment officer in April 2012. Lee was the first Korean national to enter the role.
KIC declined to comment on the matter, but media reports said the institution expects to fill the role by the end of the year.
Choi joined KIC in July 2011 as a replacement for Young-wook Chin, who had completed his three-year term, PEI reported earlier. Choi said in his inauguration speech that KIC would increase strategic and alternative investments and act as an anchor for overseas investments by Korean firms.
Rising commodity prices, the emerging strategic importance of particular regions and capital resettlement due to volatile financial markets provide favourable opportunities for sovereign wealth funds.
Chong-suk Choi, former president and chief executive, Korea Investment Corporation
“Rising commodity prices, the emerging strategic importance of particular regions and capital resettlement due to volatile financial markets provide favourable opportunities for sovereign wealth funds,” Choi said earlier.
As of August 2013, KIC had assets under management of about $57 billion, with 6.1 percent allocated to alternative investments up from 5.8 percent in 2010, according to PEI’s Research & Analytics division. It invests 1.92 percent of its capital to private equity.
Korean LPs have been increasing their exposure to private equity, in particular foreign private equity, across the board.
In November last year, Korea’s Government Employees’ Pension Service said it would increase its allocation to foreign private equity and other alternative asset classes in 2013, head of alternative assets Hyuk-Do Kee told PEI earlier.
The fund currently allocates 1.7 percent of its alternatives portfolio to fund managers outside Korea. He said, “In the upcoming year, we have a plan to increase investment outside [Korea] gradually. We expect the ratio of overseas [alternative] investment to be 6.8 percent next year and 7.8 percent in 2015.”
Based in Seoul, KIC was launched in 2005 with a view toward enhancing the sovereign wealth and development of the domestic financial industry. It is also mandated to manage some of the country’s exchange reserves entrusted by the government and the Bank of Korea.