South korea state fund steps up alternative investment

South Korea's state fund is stepping up its alternative investments in the next decade.

Korea Investment Corp., the nation’s $72 billion sovereign wealth fund, has announced that it will double its investment in alternative assets to compensate for declining returns from traditional products such as stocks and bonds.

“We’ll have to embrace the lower return expectation from traditional assets and that will continue for a considerable period,” Choo Heung Sik, 56, the chief investment officer of the state fund, known as KIC, told Bloomberg.

“Considering such an environment, expanding into alternatives is one of the most efficient way to protect yield in the mid-to-longer term.”