Korea Investment Corp. plans to allocate up to $10 billion to alternative assets, which would triple its current investment in the sector.
Bloomberg Businessweek reported that the Korean sovereign wealth fund wants to increase its holdings of private equity, real estate and hedge fund to 20% of its total investment portfolio by 2016. It currently invests about $6.1 of its total portfolio in alternative investments.
The article cited Michael Maduell, president of the Las Vegas-based Sovereign Wealth Institute, who said that investing in alternatives “reduces return volatility.”
KIC was founded in 2005 to invest some of the nation’s foreign-exchange reserves offshore.