Korean overseas fund investment surge 23% with 60% placed in alternative assets

2019.09.04 11:43:38 | 2019.09.04 13:27:56

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Overseas fund investments by Koreans have sharply increased this year amid lackluster asset prices at home, with the bulk placed in funds devoted to alternative assets.

The outstanding balance in overseas fund investment by Koreans totaled 166.8 trillion won ($137.9 billion) as of the end of August, surging 30.9 trillion won or 23 percent from the end of last year, according to Korea Financial Investment Association on Tuesday.

The bulk has been in private placement as publicly available funds increased by a mere 3.3 trillion won.

Investment in non-traditional assets jumped amid resurging of low-interest environment and volatility in financial markets across the world, with the balance totaling 21.2 trillion won to make up two-thirds of the additions in overseas funds this year. Assets in funds investing in offshore real estate rose 9.7 trillion won. The balance in special asset funds investing in non-securities such as gold, crude oil, and aircraft increased by 11.5 trillion won.

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Funds investing in offshore real estate have become an increasingly attractive investment option as they guarantee steady income over a fixed period of time with monthly rents paid by tenants, said an asset manager of Mirae Asset Global Managements.

Net assets of offshore real estate funds managed by Mirae Asset Global Investments topped 5 trillion won, and the amount in overseas special asset funds reached 2.7 trillion won as the end of August. IGIS Asset Management manages real estate funds of over 5 trillion won and Samsung SRA Asset Management 4 trillion won.

Hanwha Asset Management had 4.9 trillion won in special asset funds, the largest of all asset managers in Korea, as of August-end. Its special asset funds focused on investing in offshore infrastructures, such as water and sewage facility in the United Kingdom, according to a Hanwha Asset Management official.

By Chung Seul-gi and Cho Jeehyun

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