Investing assets entrusted by the government and Bank of Korea in the global financial market
The Korea Investment Corporation has grown to become a globally leading sovereign wealth fund, with total assets under management of USD 189.4 billion by the end of 2023.
First entrusted with USD 1 billion in 2006, KIC has consistently expanded its operating scale through stable and capable management. Assets under management (AUM) at the end of 2023 totaled USD 189.4 billion.
Following a principle of diversification, KIC manages a portfolio that is 78.0% traditional assets and 22.0% alternative assets, including private equity, real estate, infrastructure and hedge funds.
The AUM of our alternative assets, which have a low correlation with traditional assets and capture an illiquidity premium through long-term investment, increased from USD 38.7 billion in 2002 to USD 41.7 billion in 2003, accounting for 22.0% of the total portfolio.
(USD billion, %)
| Category | NAV | Asset allocation | |
|---|---|---|---|
| Total | 189.4 | 100.0 | |
| Traditional assets | Equities | 74.2 | 39.2 |
| Fixed income | 59.8 | 31.5 | |
| Subtotal* | 147.7 | 78.0 | |
| Alternative assets | Private equity | 17.9 | 9.4 |
| Real estate and infrastructure | 17.7 | 9.4 | |
| Hedge funds | 5.3 | 2.8 | |
| Subtotal* | 41.7 | 22.0 | |
(%)
| Category | 2022 | 2023 |
|---|---|---|
| Total | 100.0 | 100.0 |
| Equities | 38.3 | 39.2 |
| Fixed income | 31.6 | 31.5 |
| Alternative assets | 22.8 | 22.0 |
| Other | 7.3 | 7.3 |
(USD billion)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| NAV | 157.3 | 183.1 | 205.0 | 169.3 | 189.4 |
| Cumulative net investment income since establishment | 49.2 | 71.0 | 87.9 | 58.2 | 77.9 |
(USD billion)
KIC’s return on total assets in 2023 was at 11.59%, with a five-year annualized return of 6.10% and an annualized return since inception of 4.63%.
(%)
| Category | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|
| Return on total assets (before fees) |
15.39 | 13.71 | 9.13 | -14.36 | 11.59 |
| Return on total assets (after fees) |
15.21 | 13.52 | 8.94 | -14.46 | 11.44 |
| Annualized return since inception |
4.60 | 5.22 | 5.47 | 4.12 | 4.54 |
The return on traditional assets in 2023 was 14.35%, -6 bps compared to the benchmark.
| Category | 2019 | 2020 | 2021 | 2022 | 2023 | Annualized return for the past five years | Annualized return since inception | |
|---|---|---|---|---|---|---|---|---|
| Total | Return (%) | 16.62 | 14.62 | 6.75 | -17.58 | 14.35 | 6.10 | 4.63 |
| Excess return (bp) | 33 | 144 | -39 | -52 | -6 | 10 | 15 | |
| Equities | Return (%) | 27.52 | 19.16 | 18.61 | -19.27 | 22.44 | 12.24 | 5.55 |
| Excess return (bp) | 6 | 261 | -92 | -137 | -13 | -7 | -12 | |
| Fixed income | Return (%) | 7.53 | 9.88 | -4.62 | -16.65 | 6.34 | -0.02 | 2.59 |
| Excess return (bp) | 73 | 78 | 39 | 14 | 14 | 42 | 31 | |
Annualized return since inception: 7.83%
* Total includes commodities (categorized as traditional assets since April 2011)
| Asset class | Benchmark |
|---|---|
| Equities | Morgan Stanley Capital International All Country World Index ex Korea (unhedged) |
| Fixed income | Bloomberg Barclays Global Aggregate Index ex KRW ex Korea |
| Inflation-linked bonds | Bloomberg Barclays Global Inflation-linked Bond Index |
| Cash | ICE BofA Merrill Lynch 3-Month US Treasury Bill |
| Private equity | Morgan Stanley Capital International All Country World Index ex Korea (unhedged) + 2%, 3 months lagged |
| Real estate · infrastructure | G7 inflation rate + 4%, 3 months lagged |
| Hedge funds | BofA Merrill Lynch 3-Month US Treasury Bill + 3.5%, 1 month lagged |
| Private debt | Morningstar Global Leveraged Loan Index + 1.25%, 3 months lagged |
(As of January 1, 2024)