Korea Investment Corporation (KIC), the sovereign wealth fund of South Korea, is opening a new office in San Francisco within the year as it seeks to explore investment opportunities in Silicon Valley, according to Korean media reports.
KIC chairman Heenam Choi, speaking at the fund’s annual press conference held in Seoul, said KIC’s global operations had been limited to financial hubs such as New York, London, and Singapore.
The fund will partner with pension funds, private equity, and asset management firms based in California and will specialise in alternative investments going forward, Choi said.
The move, he told reporters, will bring it closer to the inner circle in Silicon Valley where the fund can explore investment opportunities and get better access to information about promising startups in the area.
“Instead of pursuing our previous strategy of expanding presences in international financial hubs, we will seek a new localization strategy tailored for alternative assets,” Choi was quoted as saying.
KIC plans to send two employees to the San Francisco office, which will be under supervision of the fund’s New York branch.
KIC chief risk officer Yoo Chang-ho told reporters that the New York office is too far from San Francisco that it has become difficult for the fund to join Silicon Valley’s inner circle.
KIC already operates KIC Silicon Valley, a program that helps Korean technology companies wanting to expand their business in global market. KIC Silicon Valley focuses on technology sectors such as AI, big data, cloud, cyber security, argument reality, virtual reality wearable and contents, digital marketing, and fintech.
KIC, founded in 2005, posted a 15.39-per cent return on investment, which translated into $20.2 billion in proceeds, in 2019. The result compared with a negative return of 3.66 per cent, or loss of $5.1 billion, a year earlier.
As of the end of 2019, the sovereign wealth fund had $157.3 billion of assets under management.
The Korean sovereign fund started investment in alternative assets in 2009 with private equity. Since then it has broadened the investment spectrum to include real estate, infrastructure and hedge funds and increased the assets under management.