Korea Investment Corporation, the nation’s sovereign wealth fund, is planning to spend up to US$10 billion to triple its allocation to alternative assets, reports Bloomberg.
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Lee Dong-ik, chief investment officer of Korea Investment Corporation, said: "The sovereign wealth fund, known as KIC, wants to increase holdings of private equity, real estate and hedge funds to as much as 20% of its portfolio by 2016 from 6.1% at the end of 2012.
"We are going to spend between US$5 billion and US$10 billion on alternative assets over the next three years. We like to have a balanced portfolio in terms of strategies and regions," he added.
KIC was founded in 2005 to invest some of the nation’s foreign-exchange reserves offshore. Initially, KIC bought bonds before adding equities in 2007. Two years later, it expanded to distressed debt, real estate and private equity for "stable long-term returns.
At the end of 2012, KIC managed US$57 billion and its asset allocation was almost unchanged from the previous year, with 45% equities, 39% bonds and about 10% mainly in cash, inflation-linked bonds and the stake in Bank of America, according to Bloomberg.
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