Kim Sunghwan, President of Korea Investment & Securities: "Global Capital Focusing on AI Data Centers... Expanding Financing Cooperation"

Expanding Financial Cooperation for AI Data Centers

Adjusting Bond Duration and Hedging Strategies Amid High Interest Rates

Joint Product Development with Firms Like Fidelity

Kim Sunghwan, President of Korea Investment & Securities, highlighted artificial intelligence (AI) data centers as a key area of interest among global financial institutions. With the rapid spread of AI demanding massive capital for data center construction and equipment, he outlined plans to expand financing cooperation with international financial firms in this sector.

At a press conference during 'KIS Night in New York 2026,' held at Lotte Hotel New York on the 10th (local time), Kim explained, "I noted Korea's favorable market environment thanks to large semiconductor and defense companies, but the topic mentioned most often by global financial firms was data centers."

Korea Investment & Securities has established a strategic partnership with PIMCO, a world-class bond investment management firm. President Sung-Hwan Kim (right in the photo) met with Emmanuel Roman, CEO of PIMCO, on the 9th (local time) in New York, where they agreed to promote multifaceted synergies by combining the strengths of both companies. Photo by Korea Investment & Securities

He stated, "To truly bring about the AI era, data centers are essential. While electricity and water are needed, above all, it takes an enormous amount of capital. Not only is money required to construct the buildings, but when accounting for GPUs, the size of investment becomes immense. That's why we extensively discussed the potential for joint project financing in this area."

Currently, Korea Investment & Securities is actively expanding its business in the domestic data center finance market as well. According to Kim, Korea Investment & Securities holds the largest market share in financing for data center construction projects in Korea.

Burdens of Bond Management Rise as Long-Term Treasury Yields Increase

He assessed that the recent rise in long-term government bond yields in major countries, including the United States, is increasing the difficulty of bond management. As of now, Korea Investment & Securities manages over 40 trillion won worth of bonds.

Kim said, "When interest rates fall, bond prices rise, but when rates go up, the likelihood of losses increases. Therefore, we need to employ diverse strategies, including extensive hedging and adjusting duration."

He added, "Various events, such as the Federal Open Market Committee (FOMC) or Bank of Korea Monetary Policy Committee meetings, and the announcement of inflation and employment indicators, all serve as inflection points for bond prices. At such times, we either shorten or extend the portfolio duration and adjust hedges accordingly."

He also emphasized that bond portfolios must consider both sovereign and credit bonds. Kim commented, "You cannot rely solely on government bonds; you must also hold credit assets. However, a rise in government bond yields inevitably impacts credit instruments as well. That's why portfolio strategy must be developed holistically."

Kim Sung-hwan, President of Korea Investment & Securities, is taking a commemorative photo at the 'KIS Night in New York 2026' held at Lotte Hotel New York, USA. New York (USA) – Photo by Yoonju Hwang

Korea Investment & Securities is also expanding its product strategy to leverage the high-interest-rate environment. Kim revealed that they are discussing liquidity asset management strategies in comprehensive investment accounts (IMA) with global asset managers.

He explained, "Since IMA products must be liquidated immediately upon a client's request, we need products that retain liquidity but still offer interest. We discussed such products with global asset managers, including credit assets."

Kim also mentioned the growing preference among domestic investors for monthly distribution products. "In the past, products generally returned principal and interest in lump sums at maturity. These days, domestic clients prefer products that pay dividends or interest on a monthly basis, so we are also considering plans to expand offerings in this area," he said.

"Beyond Product Sales to Joint Development"... Expanding Partnerships with Global Financial Institutions 

During this business trip to the United States, Korea Investment & Securities signed memorandums of understanding (MOUs) and formed strategic partnerships with leading global financial firms including Fidelity, Carlyle, and PIMCO. Kim emphasized that such partnerships go beyond simply bringing foreign financial products into the domestic market. In fact, Korea Investment & Securities is expanding cooperation with global financial institutions to include joint product development.

He noted, "Working with global institutions does not simply mean importing their products and selling them domestically. Through strong relationships, we can unearth new deals that our investment banking division can participate in, co-develop products by utilizing global asset managers' operational expertise, and add research to build a total global business value chain that delivers these offerings to customers through our retail and online channels."

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