South Korea’s Wealth Fund to Invest More In Alternative Assets

Sovereign wealth funds in South Korea have started to make plans for the future, as they seek to invest over $200 billion in startups dealing in alternative assets, the metaverse, and Artificial Intelligence in Silicon Valley. The head of the sovereign wealth funds, Korea Investment Corp, revealed that it was looking beyond tech stocks, as they pose risks of a hike in interest rates. 

Although the C.E.O. of K.I.C. Seoungho Jin admitted to the saturation of Silicon Valley, he said that it is still a viable investment option that’s highly profitable. According to him, alternative assets could contribute to 25% of the investment group portfolio by 2025 and grow the fund’s exposure from the current 17%. 

Alternative Assets Allocation Could Go Up In 2022

According to a report by Bloomberg, alternative assets’ allocation, including hedge funds, will rise by approximately 2% in 2022. In addition, assets under management will increase to $300 Bn.

K.I.C. has grown tremendously since Jin assumed the head of the fund, replacing Heenam Choiat. He spent more than half of his career at South Korea’s Finance Ministry, which K.I.C. is a subsidiary of. K.I.C. has expanded in size over the last five years.  

Rising Interests in the Metaverse

Interests in the metaverse have risen in the last year, as brands see the virtual world as an investment haven. Several reports have indicated that the metaverse economy will compete with the physical economy and surpass it in the next few years. Luxury brands, such as Adidas, Dolce & Gabbana, Nike, and Gucci, have all launched into the metaverse. Recently, Gucci acquired a plot of land on Sandbox, a virtual world. 

Although the amount used to acquire the land is hidden, Gucci disclosed that the decision would create a virtual fashion experience for customers. It is just one of the many moves made by the fashion brand, as it continues to strengthen its foothold in the metaverse. Last year, the brand was the first to auction its merchandise as an NFT on Christie.

Also recently, K.K.R., a U.S.-based investment firm, planned to up Animoca Brands funding to about $500 million. The Hong Kong gaming and V.C. firm underwent a $358 million funding last month, and as it stands now, its value has risen to $5 billion. Animoca Brands is behind the popular blockchain-based gaming platforms, such as Olympic Games Jam and the virtual world The Sandbox. 

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