South Korea has launched a new sovereign wealth fund with an initial capital of 20 trillion won (US$13.8 billion).
The capital will be raised through government equity investments, in-kind contributions, and equity acquisition, according to the Ministry of Economy and Finance.
“However, to prevent privatisation concerns, the government will maintain more than 50% of its stakes in government-invested public institutions and make investments within the scope of compliance with legal shareholder restrictions,” the ministry says in a statement on January 11.
The official name of the new fund was not disclosed.
Korea has another wealth fund, Korea Investment Corp. (KIC), whose main task is to manage the country’s foreign reserves.
Unlike KIC, the new fund has the ability to pursue strategic and commercially-driven investments.
It’s modelled after Singapore’s state investment company Temasek Holdings, which holds strategic stakes in some top local firms and minority interests in several renowned foreign firms, including e-commerce giants Alibaba Group Holding and Amazon.com Inc, and BlackRock Inc, the world’s largest asset manager.
