The Korean Federation of Community Credit Cooperatives (KFCC) is eyeing certain sectors that create stable revenue streams such as healthcare, daily necessities, utilities and software, as well as ESG areas, its Chief Investment Officer Park Chun-suk (Richard CS Park) said in his keynote speech at ASK 2022 on Oct. 26.
KFCC is a South Korean community bank managing 70 trillion won ($49 billion) in assets as of end-2021, allocating 37.1% of its assets under management for alternative investments. It is aiming to increase alternative investments to 32 trillion won by 2025, including 12 trillion won for overseas assets.
The institutional investor has injected more than 7 trillion won over the past three years. As less than 50% of its commitments since 2020 have been transferred to capital calls, it has ample dry powder and sees the economic slowdown as a good time to buy undervalued companies, he said.
On private equity investment, KFCC will focus on tech industries with long-term momenta such as semiconductors, hydrogen, secondary batteries and biopharmaceuticals as well as niche market investments via secondary, special situation and opportunistic strategies, the CIO added.
So far in 2022, KFCC made global investments in preparation for the post-pandemic era. It joined in the acquisition of an overseas logistics platform, made a co-investment with a European asset manager in a US travel company, as well as invested in a global sports goods firm, which expects strategic partnerships with Korean firms, Park said.
On local private equity, the institutional investor continued to bet on semiconductors – it invested in a Korean non-memory chip developer as well as a semiconductor packaging equipment company.
The CIO said that although next year will be much tougher than 2022, alternative investments made in economic crises have shown better performance than other vintage funds. By boosting alternative investment, KFCC will enhance liquidity and capital circulation in the market, the CIO added.
Write to Jihyun Kim at
snowy@hankyung.comJennifer Nicholson-Breen edited this article.
