Korean Federation of Community Credit Cooperatives (KFCC), one of the country’s biggest state-owned institutions with nearly 70 trillion won ($59 billion) under management, will invest 7 trillion won in blind-pool funds over the next three years with a hope to reap bigger profits amid prolonged low-interest environment.

KFCC will start its 7 trillion won investment with 2.3 trillion won committed in real estate, infrastructure and corporate financing blind-pool funds next year, said Kwon Kwang-seok, chief executive of KFCC as he unveiled the company’s investment plan on Wednesday. A blind-pool fund refers to a method of raising a fund without determining where the money will be invested.

KFCC acts as an asset manager for its members, who have consigned 20 to 30 percent of their assets. As of September 30, KFCC had 69.9 trillion won under management.

It would be the first time for KFCC in eight years for the company to make investment in blind-pool funds. Ministry of Public Administration and Security had banned KFCC from investing in blind-pool funds in 2012 after the company incurred a huge loss from its 403 billion won investment made in real estate blind funds in the aftermath of 2007-2008 global financial crisis.

To lower the risk, KFCC will spread out its investment - 56 percent on corporate financing, 22 percent on real estate and 22 percent on infrastructure. Also, 75 percent of its total investment will be made overseas, especially for investments in real estate and infrastructure funds.

By Lee Sae-ha and Cho Jeehyun

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