[Exclusive] Government to Establish 'Korea Future Investment Corporation' to Manage Korean-Style Sovereign Wealth Fund Targeting 100 Trillion Won by 2050

Legislation Finalized, to Be Submitted to the National Assembly This Month
Detailed Fund Design, Initial Capital, and Governance
Final Structure to Be Announced Soon
Targeting KRW 100 Trillion by 2050

The government, preparing to launch a Korean sovereign wealth fund modeled after Singapore's Temasek, will establish the 'Korea Future Investment Corporation' to exclusively manage the new fund's investments. This decision comes from the need for a 'strategic' sovereign wealth corporation, separate from the existing Korea Investment Corporation (KIC), to support industrial competitiveness and national strategic technologies. The new corporation will start with initial capital of 20 trillion won plus alpha, sourced largely from surplus semiconductor tax revenues, and aims to expand its assets under management to more than 100 trillion won by 2050.

The government, preparing to launch a Korean sovereign wealth fund modeled after Singapore's Temasek, will establish the "Korea Future Investment Corporation" to take full charge of the investment management of the new sovereign wealth fund. Getty Images

According to relevant ministries on June 2, the Ministry of Economy and Finance will announce a plan to establish the Korea Future Investment Corporation, a dedicated organization responsible for managing, operating, and investing the Korean-style sovereign wealth fund, as part of its economic growth strategy for the second half of the year later this month. The government has recently completed drafting the Korea Future Investment Corporation Act (the enactment bill for the establishment of the corporation) and plans to submit it to the National Assembly as early as this month. A government official stated, "We are monitoring progress every week by placing this as a confidential item at the ministerial meetings," and added, "We will soon finalize and publicly release the detailed governance structure, including fund design, initial capital, and the composition of the board of top decision-makers."

Although KIC, the only sovereign wealth fund in Korea, was established in 2005, the government believes a separate corporation is necessary to nurture domestic industries and secure overseas strategic technologies. KIC manages foreign exchange reserves, which serve as an emergency fund, so there are limitations in pursuing high-risk, high-return investments. Singapore, the role model for the Korean sovereign wealth fund, also operates a dual-track investment system with Temasek for industrial development and access to core technologies, alongside the Government of Singapore Investment Corporation (GIC). Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol has stated, "If Temasek in Singapore sees future growth potential, it engages in mergers and acquisitions, makes investments, and purchases real estate. If the returns look good, it invests boldly," adding, "KIC cannot operate that way."

The new corporation will launch with initial capital of 20 trillion won plus alpha. The government is considering expanding the target asset size to 100 trillion won by 2050. Since the policy is to inject surplus tax revenue generated by the booming semiconductor sector, the actual initial capital is expected to exceed 20 trillion won. The government also plans to include guidelines for the target asset size in its economic growth strategy for the second half of the year, to be announced later this month. However, given KIC's experience of significant losses during its early years, such as the acquisition of Merrill Lynch, the government is expected to pursue both indirect investment and overseas investment to build corporate investment capabilities, rather than recklessly expanding its investment targets after launching the new sovereign wealth fund.

This content was produced with the assistance of AI translation services.