President Eun Sung-soo of Korea Investment Corp. (KIC) has been inaugurated as the CEO and Chairman of the Board of Directors in January. Previously, he was an Executive Director at the World Bank from November 2014 to January 2016, representing 14 countries including Australia and the Republic of Korea.
In his inaugural speech, the new CEO said the KIC should reform its operation for its survival, noting that the sovereign wealth management firm¡¯s investments have not been as creative and dynamic as they should be, with the scale of its funds falling short of those of top wealth management firms in the world.
¡°Our overall management process should have more stringent internal controls. One thing¡¯s for sure, considering the audit results and critiques from the National Assembly and media, the KIC¡¯s very existence could come into question without change and innovation,¡± Eun said. ¡°We must also become more competitive. KIC has grown in every way since its inception, but there is room to improve, especially compared to other major sovereign wealth funds.
Leading sovereign wealth funds have more than $200 billion in assets under management, which lets them enjoy economies of scale with greater bargaining power and better access to investment information. The KIC¡¯s asset size is still relatively small and management flexibility is low, the new CEO said.
¡°We must start by rebuilding trust internally and externally. To become transparent, honest and reliable to become a ¡®clean KIC¡¯ we must have transparent investment processes and reasonable decision-making procedures, and we must strengthen the role of the Compliance Officer and improve internal controls,¡± Eun said. ¡°We also need to re-examine the culture, processes and behaviors we have come to accept as a given from the perspective of Korean citizens, and from the standpoint of those who have entrusted us with assets and other market players, to see what we can improve.
¡°Next, keeping in mind that our competitors are leading global investors, we need to help maximize the potential of all employees and nurture them to be globally competitive. While pursuing good investment returns, we must also, of course, strengthen risk management with a long-term perspective,¡± Eun said.
With a long-term perspective, transparent processes and strong investment performance, ¡°I believe KIC will become a leading sovereign wealth fund, one with more than $200 billion under management,¡± Eun projected. As assets in national pension funds and public funds are set to keep growing, foreign reserves will continue to call for efficient management. With the establishment of the Asian Infrastructure Investment Bank (AIIB), opportunities and demand for infrastructure projects in the region are expected to rise.
With these three management principles, the KIC will become one of the world¡¯s top 10 leading sovereign wealth funds by generating outstanding investment returns and a partner for the growth of the domestic finance industry and overseas expansion, the new CEO promised.
Prior to his post at the World Bank, CEO Eun was Deputy Minister of International Affairs at Korea¡¯s Ministry of Strategy and Finance during 2013 and 2014. After he started his public service career at the Ministry in 1984, Eun also served as a G20 and ASEAN+3 Finance Deputy Minister as well as the Director General and Deputy Director General of the International Finance Bureau. He was Assistant Secretary to the President for Economic Policy in the Blue House and Director of the Office of the Deputy Prime Minister. CEO Eun held posts early in his career at the World Bank and UNCTAD as well.
He holds a bachelor¡¯s degree from Seoul National University and a doctorate degree in economics from the University of Hawaii.