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KIC targeting $200bn AUM by 2020

South Korea’s sovereign wealth fund is reportedly attempting to nearly double its assets under management by 2020, its chief executive officer said at its anniversary ceremony this week.

South Korea’s sovereign wealth fund, Korea Investment Corporation is targeting to increase the assets under its management to $200 billion in three years’ time.

Eun Sung-soo, chief executive officer, of KIC reportedly announced the ambitious expansion plans at the sovereign wealth fund’s 12th anniversary ceremony earlier this week, according to the state news agency Yonhap.

The 2020 target, if achieved, would almost double KIC’s current assets under management, which amounted to $110.8 billion in 2016, as per the latest annual report. The fund achieved a total return of 4.35 percent last year, in comparison to -3 percent returns generated in 2015, a feat that Eun has attributed to the returns on alternative investments.

The state fund has been consistently increasing the proportion of alternative investments in its portfolio in a bid to diversify. In 2016, 13.7 percent of KIC’s portfolio was invested in alternative assets, which include hedge funds, private equity, real estate and infrastructure, up from 12.4 percent allocation at the end of 2015.

Within alternative investments, real estate and infrastructure together account for the highest allocation at 5.1 percent, followed by private equity at 4.2 percent.

In the 2016 annual report, Eun spoke about KIC’s continued expansion strategy for real estate but also added that the state fund would adopt a selective investment approach due to high valuations. He also said that KIC would take full advantage of investment opportunities in the private debt sector where there are stable returns.