Dear Readers,

Looking back, 2021 brought both much-awaited recovery as well as volatility.

Covid-19 vaccines started to lead us out of the pandemic. National economic initiatives raised both consumer demand and corporate earnings, which led to higher prices for equities and other risky assets. On the flipside, supply chain disruptions and inflation concerns triggered increased market volatility.

KIC’s response was to deploy a sophisticated asset allocation strategy. As a result, we achieved an annual return of 9.13% and earnings of USD 16.9 billion in 2021.

We also increased the proportion of our alternative investments from 15.3% of our total portfolio in 2020 to 17.5% in 2021 as part of our strategy to generate stable, long-term returns.

On the back of this growth, KIC’s total assets reached USD 205 billion last year – exceeding the USD 200 billion mark for the first time since our inception. For some quick history: We made our first investment in global fixed income with USD 1 billion in 2006, hit USD 50 billion in total assets in 2012 and exceeded USD 100 billion in 2016.

I thank you for your support throughout the years.

Today, Covid-19 continues to affect investor sentiment while concerns around inflation and the tightening of monetary policy point to accelerated interest rate hikes. The war in Ukraine, geopolitical tensions (U.S.-China) and supply chain risks also pose issues. Uncertainty seems to be the only sure thing.

Despite these circumstances, KIC’s goal is to achieve more growth and more milestones as a leading sovereign wealth fund.

We strive for outstanding investment performance not only through increasing our assets under management and capturing great investment opportunities, but also through maximizing our investment experience, knowledge and overall capabilities.

Specifically, we will continue to refine our macroeconomic research to make sure we invest with a balanced outlook. Through building an optimal portfolio for target rates of return and discovering new asset classes, we will enhance our asset allocation strategy.

We will also work to seamlessly implement new strategies, such as those involving artificial intelligence, big data and factor style allocation, into our investment process. The aim is to diversify our portfolio with strategies that respond to social and structural change, such as technological innovation and consumer trends.

Through expanding our direct investments, we will also be more autonomous in our investment decision-making and strengthen our management capabilities. Leveraging our global network, we plan to actively engage in joint investments with leading institutional investors.

As a responsible investment leader, we will increase our ESG investments as well. We are working on building a portfolio model that responds to climate change and better exercising our shareholder rights.

Of course, we will also foster the growth of Korea’s finance industry by 1) sharing investment information and opportunities at home and abroad, in response to growing domestic demand for overseas investments, through the KIC-led Public Community for Overseas Investment and International Financial Cooperation Council, 2) working with local asset managers for entrustments, 3) expanding the quota system for domestic securities firms and 4) participating in the syndicated loans of the overseas branches of domestic banks for alternative investments. We will also use our International Finance Academy, which offers asset management training and was started this year, to nurture Korea’s future finance leaders.

In keeping with these plans, I would like to close with my aspirations as Korea’s Ambassador for Financial Cooperation, which I was appointed earlier this year in addition to my role as the CEO of KIC. Going forward, I will do my utmost to promote the domestic finance market and attract foreign finance firms, the ultimate goal being to develop Korea as a global finance hub.

Thank you.