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/* Style Definitions */ table.MsoNormalTable {mso-style-name:”Table Normal”; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:””; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:”Times New Roman”; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} South Korea’s sovereign wealth fund (SWF), the US$25 billion (A$31.3 billion) Korea Investment Corporation (KIC), has signed cooperation agreements with Queensland Investment Corporation (QIC) and
Malaysia’s Khazanah Nasional Berhad to share resources and pursue investments with the government-owned entities. Don Lee, head of alternatives at KIC, said the Korean government supported the fund’s aim to build direct relationships with peer SWFs in order to access further investment talent and investment opportunities, including co-investments.
The non-binding agreements with the $65 billion QIC and $28.8 billion Khazanah, signed as memorandums of understanding, stated the intention of each investor to pursue mutually beneficial investments with KIC across the globe. “There is potential for co-investment opportunities, not only in our home countries but globally as well,” Lee said. “But at the moment we are just getting to know each other.” He said that KIC had not committed to any specific investments with QIC or Khazanah.
QIC chief executive, Doug McTaggart, signed the agreement in Seoul last week, while Tan Sri Dato’ Azman, managing director of Khazanah, did so on the sidelines of the 2009 World Economic Forum on East Asia, of which he is a co-chair. In a statement, Azman said the agreement aimed to lay groundwork for a “two-way investment flow” between the Malaysian and South Korean economies, encompassing co-investments and cross-border investments in private companies.
Since its 2005 inception, the KIC has been restricted to investing offshore. But the South Korean government was in the process of rewriting KIC’s investment mandate to permit investment in the domestic economy, Lee said. This followed public criticism of the fund at home for its $2.5 billion investment in Merrill Lynch last year.
Lee was demure on whether the KIC was tactically aligning itself with other sovereign investors to combat the clout of bigger funds, such as regional giants China Investment Corporation and Singapore’s GIC, but said the fund held relationships with other “prominent” SWFs and was discussing cooperation agreements with funds in the Middle East. Meanwhile, KIC expanded its alternatives program to include private equity. venture capital and real estate in a portfolio that is slated to comprise 20 per cent of the fund , Lee said.
