KIC bets on Asian real estate; eyes residential, data centers

The Korea Investment Corporation (KIC) is zeroing in on Asia’s real estate market by region, while targeting residential facilities and data centers as key sectors, its Chief Executive Park Il Young said on Wednesday.

The sovereign wealth fund is also focusing on energy and digital infrastructure and expanding private credit investments to generate returns above market benchmarks.

“We are paying close attention to Asia, where borrowing costs are stabilizing and to residential properties and data centers, which continue to see resilient demand,” Park said in a keynote speech at the global investment conference ASK 2025. “Prime assets that have undergone price corrections are also expected to provide long-term investment opportunities.”

INFRASTRUCTURE

Infrastructure is becoming a core asset class of global institutional portfolios as interest rates remain elevated over an extended period.

By sector, the CEO said that clean energy generation and storage facilities, as well as digital infrastructure, are attractive amid the global shift to low-carbon energy and the growing demand led by artificial intelligence.

In particular, AI technology innovation is creating a new investment ecosystem across all asset classes, including private credit, venture capital and infrastructure.

“AI technology is creating promising medium to long-term investment opportunities as the technology is driving productivity gains and business model transformation,” Park told the biannual alternative investment conference.

PRIVATE CREDIT

Since last year, KIC has classified private credit as a separate asset class for alternatives and gradually increasing allocations to private credit across diverse strategies from direct lending and mezzanine loans to real estate and infrastructure project financing.

“We are trying to achieve alpha returns that exceed market benchmarks,” the CEO said of its private credit strategy.

PRIVATE EQUITY

Still, private equity remains the largest component of the fund’s alternative assets.

Despite the sharp shift in the investment landscape since US President Donald Trump’s return to the White House and lingering geopolitical risk, Park said US tariff policies will have limited impact on its private equity assets.

He added that KIC’s private equity portfolio is composed of businesses less vulnerable to the US tariff hikes, without elaborating further.

Its alternative assets exceeded $45 billion at the end of 2024, accounting for 22% of the fund’s total assets under management. That compares to its alternative investments of $11.4 billion in 2015. 

Write to Yeonhee Kim at yhkim@hankyung.com
 

Jennifer Nicholson-Breen edited this article.