South Korea’s sovereign fund Korea Investment Corp. (KIC) will adopt the stewardship code, a set of guidelines for institutional investors to exert their voting rights, to better manage public funds.
Eun Sung-soo, chief executive of KIC in a press conference on Wednesday said that KIC will apply the stewardship code, possibly in the beginning of next year. A stewardship code encourages investors to be more actively involved in corporate management such as in the decision-making of merger and acquisitions and dividend payouts with the goal of maximizing shareholder benefit.
The state institution will keep asset management status quo in foreign currencies confidential.
In addition to adopting stewardship code, KIC will also invest around $300 million in the so-called environmental, social and governance (ESG) fund that seeks investment in socially and environmentally responsible companies.
The sovereign fund manager will also gradually increase the volume of assets consigned to local fund managers from current $780 million to foster their growth while encouraging global fund managers’ entrance into local market. KIC plans to give advantages to foreign fund managers that own 30 percent or more stake in local firm to attract their investment as well as create jobs in Korea, said Eun.
With an aim to expand its reach in the global market, KIC will open its third overseas office in Singapore next month. KIC will put efforts to unearth new investment opportunities in the fast growing infrastructure market especially in Australia, India and Southeast Asia, said Eun. KIC currently operates two overseas offices - in New York and London.
As of June 30, KIC has $122.3 billion assets under management. Its return on assets in the first six months this year reached 8.17 percent and exceeded that of last year with 4.35 percent. It recorded 12.15 percent yield rate on its overseas securities investments alone in the first half this year.
By Han Woo-ram and Roh Seung Hwan
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