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ASSET OWNERS

Korea Investment Corp. reports 4.4% investment gain for 2016, led by alternative assets

Korea Investment Corp. announced its assets ended 2016 at $110.8 billion, up 21% from the year before.

The Seoul-based sovereign wealth fund said in a May 12 news release that investment gains of 4.35% on the $91.8 billion in assets KIC reported at the close of 2015 accounted for roughly $4 billion of that annual gain.

The announcement didn't explain where the rest of the roughly $15 billion in gains for the year came from, but in mid-2015 top KIC executives had predicted South Korea's Ministry of Finance would be making an additional injection of more than $10 billion into the fund.

The news release said the fund's gains on long-only assets during 2016 came to 3.96%, with stocks contributing 5.85% and bonds delivering 1.46%.

KIC's allocations to alternatives — composed of private equity, hedge funds, real estate and infrastructure — posted a gain of 6.57% for the year.

The fund's allocations at the end of 2016 were 41.2% stocks, 33% bonds, 13.7% alternatives, 10.7% “others” – including raw materials and mixed, asset allocation type strategies — and 1.4% in the “strategic investment” KIC made in Bank of America a decade ago, as the global financial crisis was unfolding.

At the close of 2015, the fund's allocations came to 39.5% stocks, 34.4% bonds, 12.4% each alternatives and “others,” and 1.3% in Bank of America.