2023 Annual Report

Development of the Domestic Finance Industry

As an overseas investor, KIC strives to support the development of Korea’s finance industry by sharing our global investment experience and management expertise with domestic financial institutions.

Partnership

Expanding mandates to domestic managers and co-investing with domestic financial institutions

KIC is expanding its mandates to domestic asset managers to help build their overseas investment know-how. In 2023, KIC selected, for the first time, a domestic manager for our global fixed-income investments.

By the end of the year, we selected six domestic managers – four for equities, one for hedge funds, and one for fixed-income assets. Going forward, KIC will increase the size of our mandates for domestic managers as well as diversify their asset classes and investment strategies in line with the development of Korea’s asset management industry.

KIC also shares information on promising investment opportunities with major domestic institutional investors and promotes ongoing collaboration. We identify high-quality alternative investment opportunities, discuss coinvestment opportunities with domestic institutional investors, and provide information and share networks related to major alternative investment institutions overseas, facilitating a better understanding of the global market.

In 2021, KIC established a hedge fund joint venture^JV with the National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives to support domestic financial institutions investing in overseas hedge funds. In 2022, the Seoul Guarantee Insurance Company and Tongyang Life Insurance joined the JV.

We will continue our multifaceted efforts to grow with Korea’s asset management industry and institutional investors.

Expanding cooperation with domestic brokerage firms and international investment advisors

KIC uses the platforms of domestic securities firms for global equity trading. To bolster their trading capabilities, we introduced a quota program in 2020 to entrust the firms with a portion of our equity transactions.

We started with a 10% entrustment threshold for domestic brokerage firms and expanded it to 20% in 2023. We also doubled the number of participating securities firms last year.

Going forward, KIC plans to strengthen communication with domestic securities firms, facilitating the development of robust overseas equity trading capabilities beyond mere entrustments.

KIC also actively collaborates with Korean financial firms in overseas alternative investments to enhance the loan-execution capabilities for global investments of domestic banks and securities firms. We are progressively broadening the participation of domestic banks’ overseas branches in loan syndications. And in 2023, we executed more than USD 700 million in new loans through domestic financial firms.

When investing in alternative assets, KIC also works with domestic institutions in the advisory process—including legal, tax, accounting, and consulting firms—to bolster their ability to advise on global alternative investments.

KIC encourages overseas financial institutions to enter the Korean market as well, to share advanced financial know-how with the domestic finance industry.

Through active communication, we help major counterparties better understand the Korean market and recognize the need to do business here. And when selecting new managers, we consider whether they will.

Knowledge sharing

Public Community for Overseas Investment ^PCOI

KIC launched the Public Community for Overseas Investment (PCOI) in 2014 as a platform for sharing overseas investment information and experiences with domestic pension funds, mutual aid associations, and specialized banks. The PCOI has 26 member institutions as of the end of 2023.

In 2023, KIC held four meetings of the PCOI. In the first half of the year, meetings focused on the global macroeconomy, bond market, and asset allocation strategies. In the latter half, participants looked at the private debt market as an investment strategy for effectively responding to an environment of inflation and higher interest rates. KIC also held an "ESG Day" co-organized by the Korea Chamber of Commerce and Industry to discuss how domestic companies should respond to the expansion and revitalization of ESG investments.

KIC will continue to support the development of Korea’s finance industry by sharing our global investment expertise with member institutions.

Highlights of the Public Community for Overseas Investment in 2023

Members of the Public Community for Overseas Investment

Members of the Public Community for Overseas Investment

Institution Name	Institution Name	Institution Name
Korea Investment Corporation	Korea Post	Police Mutual Aid Association
Government Employees Pension Service	Science and Technology Employees’ Mutual Aid Association	International Finance Center
Military Employees’ Mutual Aid Association	Korea Local Government Employees’ Mutual Aid Association	Private School Teachers’ Pension Fund
Korea Teachers’ Mutual Aid Association	Korea Development Bank	Korea Eximbank
Korea Asset Management Corp	Public Officials Benefit Association	Construction Workers Mutual Aid Association
Korea Trade Insurance Corporation	Korea Fire Officials Credit Union	Korea Hydro & Nuclear Power
Korea Federation of SMEs	Korea Labor Welfare Corporation	Korea Cooperative Insurance Corporation
Korea Deposit Insurance Corporation	Korea Federation of Agricultural Cooperatives	Korea Federation of Industrial Unions
Korea Atomic Energy Agency	SGI Seoul Guarantee Insurance Company

International Financial Cooperation Council ^IFCC

KIC runs the International Financial Cooperation Council with its overseas offices in the global financial centers of New York, London, Singapore, and San Francisco. Our aim is to share investment information and promote mutual cooperation with Korean public and private investment institutions in each region.

The IFCC was launched in 2017 in New York, 2018 in London, 2019 in Singapore, and 2022 in San Francisco. The councils hold meetings featuring presentations and discussions with experts from leading local asset managers and investment banks. In 2023, KIC held seven meetings in New York, five in London, one in Singapore, and two in San Francisco.

Through the IFCC, KIC shares information on global financial market trends and promising investment targets. We also seek economies of scale by collaborating on co-investments when identifying excellent investment opportunities.

We strive to serve as an active gateway for domestic investors entering overseas markets and networks.

International Finance Academy

The International Finance Academy was launched in 2022 to support the development of the domestic finance industry. It has since been fostering overseas investment rofessionals and strengthening their capabilities. In 2023, the academy held 15 seminars on overseas investment with lecturers comprising mainly current and former KIC employees. Through selecting topics based on target audience and broadening the scope of participants, the academy attracted 377 people from 67 organizations.

KIC plans to grow the International Finance Academy with its asset management know-how and network. Through identifying topics that reflect educational needs and widening participant scope, we aim to help grow Korea’s overseas investor base and develop the domestic finance industry.