South Korea ADIA Merger

In an attempt to escalate investments for the two, the Abu Dhabi Investment Authority (ADIA) is joining up with South Korea, seeking to develop the region’s state-run funds in a global capacity. The latter is known as being “one of the world’s largest sovereign wealth funds.” The National Pension Service (NPS) and Korea Investment Corp (KIC) are set to reap most benefits from this alliance which will enable ADIA to make investments through a South Korean local brokerage.

NPS Credibility

The NPS has some serious credibility. It is the world’s fourth leader in pension funds, standing at over 300 trillion won. But one can always take things further. It is today trying to escalate its overseas investments in the field of resources development.

KIC Financing

Where does the Korea Investment Corporation fit into all this? This organization has only been around for just over five years with the aim of “enhancing sovereign wealth and contribut[ing] to the development of the financial industry by efficiently managing assets entrusted by the Government and the Bank of Korea.” As well, it seeks to keep hold of its long-term purchasing power on its assets and “exceed investment target return” through the investment of “well-diversified, foreign currency denominated assets transacted in the international capital markets.”

ADIA’s Portfolio

ADIA is pretty impressive too. Owned by the Abu Dhabi government, the authority has been in business for over 35 years and is today recognized as a “globally diversified investment institution.” It spans over two-dozen areas, including: fixed income, private equity, infrastructure and equities.

So all in all this merger looks like it’s going to be mutually beneficial to the region and the authority. As soon as there is such a cohesion, it has a much greater possibility of being able to have a much larger and longer-term impact on the global economy.

South Korea’s KIC Coordinates Sovereign Funds For Mutual Investments.

South Korea’s $37 billion sovereign wealth fund, The Korea Investment corp. intends to make three to four strategic investments in the coming year. They will invest with other state funds in order to diversify their portfolio.

Chief Investment Officer Scott E. Kalb said that “We are in discussions with our counterparts, sovereign wealth funds all over…We have already looked at a number of transactions together and we’re looking at some that are pending — our end goal is to wind up having a diversified strategic portfolio in a variety of sectors and countries.”

According to Kalb, KIC is investing more in public and non-traditional assets such as real estate and private equity in developing countries due to growth opportunities.

KIC has invested in some infrastructure and real estate investments in China. It has purchased properties in other Asian markets, African private equity, and is considering investments in Latin America, India, and more in China, he said. The company is investigating purchasing Japanese property due to rising prices.