Friday, May 16th, 2014
SEOUL, KOREA - Korea's top-ten institutional investors including the National Pension Service will invest up to 26 trillion won this year in the alternative investment market, including real estate, private debt, and stock funds. The cumulative balance of alternative investment by the year's end is estimated at 121 trillion won, the first time for the balance to surpass the 100-trillion-won level.
At the Korean Economic Daily-sponsored ASK 2014 Summit: Global Private Debt & Equity Forum held on May 14 at Conrad Seoul Hotel, as many as 750 investment professionals and institutional investors from across the world gathered. Top institutional investors, including the National Pension Service, Korea Investment Corp., Korean Teachers Credit Union, Korea Post, Korean Federation of Community Credit Cooperatives, Public Officials Benefit Association, Samsung Life, Kyobo Life, Hanwha Life, and Samsung Fire & Marine, said alternative investment would be one of the best ways to invest in the era of low interest rate.
The average growth rate of alternative investment by the top-ten Korean institutional investors was 59 percent from the previous year. For example, the National Pension Service expects that its alternative investment balance as of the year's end would be 54 trillion won, up 35 percent from the end of last year. Life insurance companies under pressure from shrinking returns are also turning their attention to alternative investment opportunities. For instance, Samsung Life has set aside 2.35 trillion won for the budget for alternative investment, up 66 percent from the last year. Hanwha Life will also raise the budget 65.8 percent this year.
The Ministry of Strategy & Finance, the agency responsible for the management of the sovereign wealth fund Korea Investment Corp., plans to increase the fund's alternative investment ratio to 20 percent from 9.6 percent by the end of last year. Ahn Hong-cheol, Korea Investment Corp. president, said in a keynote speech, "It is necessary for 16 institutional investors such as the Korea Investment Corp., National Pension Service, and Korea Post to consider pooling their resources and improve investment effectiveness." The second ASK 2014 Summit was attended by 200 investment professionals from 21 countries worldwide, making itself one of the best alternative investment forums in Asia.