The Korea Investment Corporation (KIC) has yet to deploy the $5 billion commitment made in 2015 by the finance ministry, intended to support South Korean companies’ outbound mergers and acquisitions.
The delay was attributed to uncertainties surrounding expected returns and business outlooks, valuation gaps and buyers’ withdrawals from transactions, according to Park Min-gyu, a member of the ruling Democratic Party and the National Assembly’s Strategy and Finance Committee, on Thursday.
The sovereign wealth fund has reviewed 16 cross-border transactions involving South Korean companies as strategic buyers between 2019 and August in an effort to deploy the capital.
Of those, four deals remain under KIC’s review, while the others have yet to bear fruit, Park cited data submitted by the fund for its annual parliamentary audit.
Private investors have occasionally outpaced KIC in securing high-value deals.
In response, a KIC official said it has set up a dedicated team to accelerate the deployment of the $5 billion fund.
As part of such efforts, KIC is expected to commit between $100 million and $200 million to two to three Korean private equity firms in its first allocation to homegrown PE houses in its two-decade history, according to investment banking sources last month.
Founded in 2005, KIC manages $206.5 billion entrusted by the Bank of Korea and the finance ministry as of the end of 2024.
It is banned from making domestic investments, except for the $5 billion committed by the finance ministry.
Park urged the KIC to broaden its portfolio to include small and medium-sized enterprises and startups in order to support their global expansion.
By See-Eun Lee
see@hankyung.com
Yeonhee Kim edited this article.
