The Democratic Get together of Korea is pushing ahead a invoice to permit the Korea Funding Corp. (KIC) to speculate not solely abroad but additionally domestically. The plan goals to foster home strategic industries via KIC, the nation’s solely sovereign wealth fund.
Based on political circles, Rep. Kim Tae-nyeon of the Democratic Get together is scheduled to suggest an modification to the Korea Funding Company Act containing such provisions on Dec. 1. The modification contains provisions to exceptionally permit home funding alternatives for KIC, which in precept can solely handle entrusted property abroad.
The modification permits KIC to handle property in won-denominated type for property beneath a ratio decided by a presidential decree via revision of the Korea Funding Company Act. Rep. Kim defined the aim, stating, “Within the case of Singapore, which is seen as a finest observe instance for funding establishment administration, the federal government establishes funding establishments within the type of separate legal guidelines and impartial businesses, enabling autonomous {and professional} funding administration, thereby contributing to nationwide financial growth and enlargement of future development engines,” including “It’s essential to benchmark this and introduce it to our nation as nicely.”
Beneath present regulation, KIC can solely handle property entrusted from the Ministry of Financial system and Finance, the Financial institution of Korea, and others in overseas currency-denominated property corresponding to {dollars}. Whereas it will possibly handle won-denominated property briefly when unavoidable, that is restricted to depositing in monetary establishments or buying authorities and public bonds.
The Democratic Get together plans to make the most of a part of KIC’s managed property for fostering numerous strategic industries promoted by the federal government via enlargement of the company’s position. The intention is to allow the sovereign wealth fund to contribute to home business assist, much like main competing international locations, in a scenario the place huge funding funds are wanted for Korea’s core high-tech industries corresponding to synthetic intelligence (AI) and semiconductors. As of 2024, property managed by KIC quantity to $206.5 billion (roughly 302 trillion received) based mostly on internet asset worth.
