KIC and ICD form joint investment committee

The sovereign wealth funds of Korea and Dubai have entered into a joint partnership, which may result in the creation of an investment fund going forward.  

The sovereign wealth funds of Korea and Dubai have entered into a partnership to make joint investments in various asset classes, including real estate, across the world.

Korea Investment Corporation (KIC) and the Investment Corporation of Dubai (ICD) signed a memorandum of understanding to “seek co-investment opportunities and strengthen the mutual cooperation of the two entities”.

“To foster this, both parties will not only exchange investment experience, expertise and information, but also plan to establish a joint committee,” a KIC spokesperson told PERE in an email response.

The details of the partnership are not fully known yet. However, PERE has learnt that the two sovereign wealth funds are also considering establishing an investment fund in the future, even though the fund size is yet to be determined.

The structure of the partnership appears to be similar to the one between KIC and the Qatar Investment Authority (QIA) launched in November last year. The two state funds reportedly announced the creation of a $2 billion investment fund, with each group contributing $1billion in equity, in addition to setting up a joint committee in charge of establishing and executing the fund.

As of June 2013, ICD had AED 468.5 billion in assets under management, of which close to 7 percent is held in the real estate and hospitality sector combined. Most of its investments, so far, are within the Middle East. In 2013, it formed a joint venture with Brookfield Asset Management for the establishment of a real estate fund in the Dubai International Finance Centre, to make real estate investments in Dubai.

Korea Investment Corporation has been actively adding to its alternative investments portfolio, led by plans to invest a total of $10 billion in the sector by 2016, which would comprise 20 percent of the total assets. According to available statistics from its 2013 annual report, the fund had $5.7 billion invested in alternatives out of the total assets under management worth $72 billion, as of December 2013. Close to $1.5 billion was invested in the real estate sector.