SEOUL, SOUTH KOREA – May 25, 2021 – Amsler Wealth Management has today revealed that South Korean institutional investors are focused on increasing their exposure to foreign alternative assets and diversifying their asset classes and destinations.
“We are finding institutional investors are venturing into asset classes that could potentially boost post-pandemic recovery and a sustainable future in order to achieve medium-risk and long-term investing through illiquid assets,” said Thomas Hart, Head of Corporate Equity Derivatives at Amsler Wealth Management.
The National Pension Service, for example, is seeking to boost its exposure to global infrastructure from 25 trillion won to 39 trillion won ($34.5 billion) by 2025, based on the expectation that renewable energy and digital infrastructure will assist the post-COVID-19 recovery.
Another Korean pension scheme, the Korea Teachers’ Pension, plans to increase its allocation on foreign alternative assets from 10% to 25% by 2025. So far, infrastructure assets have accounted for a third of the 3 trillion won invested in international alternative assets.
“Major institutional investors are now looking to boost their portfolios with foreign alternative assets. This is due to the current appetite for Korean institutional investors allocating more capital to green and digital infrastructure,” said Stanley Miller, Director of Private Equity at Amsler Wealth Management.
“Korean investors are heavily betting on digital infrastructure assets and assets linked to environmental, social, and governance factors, but doubts about distressed assets continue to outweighing confidence,” he added.
Meanwhile, Korean institutional investors’ risk appetite has intensified as they look further afield to second-tier destinations or target asset classes that are new to Korea’s investment landscape, according to data gathered by Amsler Wealth Management.