Korea Wealth Fund to Boost Bets on AI Startups, Eyes China Tech

wnennm4yxmicl2e]yygeva0b_media_dl_1.png Korea Investment Corp.

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(Bloomberg) — South Korea’s sovereign wealth fund plans to increase allocations to tech startups and venture capital funds as part of its broader push to deepen exposure to artificial intelligence and other disruptive technologies. 

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Korea Investment Corp., which manages $206.5 billion in assets, is expanding its allocation to alternative assets to enhance returns, and exploring tech investment opportunities in China, Chief Executive Officer Park Il Young said in an interview with Bloomberg. 

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KIC is also ramping up its bets on AI and tech companies in the public markets and exploring opportunities across the AI value chain — from data centers and energy infrastructure to core technologies and applications, he said. 

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Investing in startups and VCs offers an early access to promising trends as well as potentially high returns, according to Park.

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“Rather than responding to short-term volatility, we are trying to focus on long-term growth potential and structural trends,” he said. “We expect US market strength to continue, especially in the tech sector.”

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The renewed focus marks a strategic pivot aimed at enhancing the fund’s mid- to long-term performance. KIC, launched two decades ago with an initial capital of $1 billion, has expanded to $206.5 billion in assets under management as of end-2024. Over that period, the sovereign wealth fund delivered an annualized return of 4.75%.

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Park, who took the helm in September, is seeking to boost the fund’s performance. Lawmakers have criticized KIC for lagging behind its peers. Norway’s sovereign wealth fund, Norges Bank Investment Management, posted a 13% return last year, versus KIC’s 8.49%.

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While KIC’s exposure to startups and venture capital remains relatively small and is not broken out separately from its private equity portfolio, the plan signals a deeper commitment to early-stage innovation. Park said the fund has a strong network in Silicon Valley through its San Francisco office.

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The US remains KIC’s most significant market. Roughly two-thirds of its public equity portfolio is invested in the US. Its top holdings include a $3.1 billion stake in Nvidia Corp. and $2.7 billion in Microsoft Corp. They exclude KIC’s indirect exposure through other investment vehicles. 

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Park, 56, assumed the CEO role in September. Before that, he served as an executive director at the World Bank, where he developed expertise in renewable energy — another focus area for KIC as AI accelerates global power demand. A short stint to support Korea’s startup ecosystem about eight years ago as part of his long career at the government also helped shape his investment outlook.

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That experience gave him a front-row seat to how venture capital firms were investing early in platform startups and AI, and some of those startups went on to become Korea’s leading tech platforms.