The financial authorities said on the 26th that as of the end of February this year, overseas private credit investments by the financial sector and pension funds totaled 55.9 trillion won. The level was unchanged from the end of the previous year, but it was up 15.2 trillion won (37.2%) compared with the end of 2023.
As of the end of February this year, overseas private credit investments by the financial sector amounted to 0.42% of the financial sector's total asset of 7,315.3 trillion won at the end of last year, a low level. By segment, insurers accounted for the largest share at 20.58 trillion won, or 67.4% of the total. They were followed by mutual finance institutions federations at 4.65 trillion won (15.2%), securities 2.84 trillion won (9.3%), banks 1.97 trillion won (6.5%), specialized credit finance companies 400 billion won (1.3%), asset managers 70 billion won (0.2%), and savings banks 10 billion won.
By segment, the investment ratio to total asset was highest for insurers at 1.53%, followed by mutual finance institutions federations at 1.44%, securities 0.30%, asset management 0.28%, specialized credit finance 0.09%, banks 0.05%, and savings banks 0.01%.
By investment region, the United States accounted for the largest share at 58.4%, followed by Europe at 30.7% and other regions at 10.9%. Although excessive concentration in the IT sector has been cited overseas as a key risk factor for private credit investments, the IT sector accounted for 14.8% of domestic financial companies' overseas private credit investments, which was not high. Open-ended structures in which investors can request redemptions accounted for 9.8% of total investments.
As of the end of February this year, overseas private credit investments by pension funds and others stood at 25.4 trillion won, equivalent to 1.2% of total managed asset at the end of last year. The regional breakdown was 63% in the United States, 32% in Europe, and 5% in other regions, and the IT sector investment ratio was found to be 21.8%. The share of open-ended structures in which investors can request redemptions was 4.7%, lower than in the financial sector.
Taking market conditions into account, the government plans to continue to frequently monitor the status of overseas private credit investments by the relevant agencies for the time being and to maintain a close cooperative system among ministries.