The government said on the 11th it will create a Korea-style sovereign wealth funds to maximize the value of state-owned assets totaling 1,300 trillion won.
The Ministry of Economy and Finance stated accordingly during a policy briefing to President Lee Jae-myung that day. Vice Premier and Minister Koo Yun-cheol of the Ministry of Economy and Finance said, "We will actively manage state-owned assets worth 1,300 trillion won to maximize their value," adding, "To that end, we will push to establish a Korea-style sovereign wealth funds."
Currently, Korea's sovereign wealth funds is limited to Korea Investment Corporation (KIC). The government and the Bank of Korea funded KIC in 2005. KIC manages a portion of the foreign exchange reserves on consignment. As of Aug., KIC's total consigned asset under management amounted to $74.58 billion (about 107 trillion won).
Koo said, "The Korea-style sovereign wealth funds benchmarks Temasek," Singapore's sovereign wealth fund, adding, "Unlike KIC, Temasek aggressively pursues M&A, investment, and real estate transactions based on future growth potential."
Koo added, "If there are items capable of creating national wealth, the Korea-style sovereign wealth funds is a pool of money that can move to invest, different in nature from KIC," noting, "The government currently has no vehicle that can invest this freely."
Koo also said, "We plan to start with a small pool at first and gradually grow it," adding, "We will draw up a plan in the first half to raise returns, and as it grows, it could develop into a major global player."
Koo said, "We are considering strategic industries such as domestic defense and shipbuilding as major investment destinations," adding, "Instead of simply selling in-kind paid-in stocks, if needed, we could buy more equity, attach management control, and then sell."
The Ministry of Economy and Finance (MOEF) also said it will establish a specialized review body for selling state-owned assets. (☞Related article [Exclusive] MOEF moves to set up expert review body amid criticism over "fire-sale of state assets") It decided, in principle, to prohibit discounted sales of state-owned assets.
In addition, it will expand the supply of public housing through complex development of state-owned assets. The government will pursue development by utilizing state-owned sites such as government buildings over 30 years old and closed police substations located in the greater Seoul area. It aims to break ground on 25,000 units of public housing by 2030.