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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.
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.