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LPs expanding their private equity portfolios.

by Emma Dineen

  • 13 Apr 2010
  • PE

Korea Investment Corporation (KIC), which manages assets of USD 30 billion, has revealed plans to increase its exposure to alternative investments over 2010, with a particular focus on distressed and secondary private equity, growth and venture capital, real estate, and mezzanine funds. The sovereign wealth fund, which typically commits USD 100 million to each new fund investment, is reportedly now aiming to invest 20% of its overall assets in private equity and hedge funds. It recently allocated USD 100 million to co-investment fund IFC Fund II, managed by IFC Asset Management Company, a subsidiary of the International Finance Corporation. The fund seeks investment opportunities in Africa, Latin America, and the Caribbean and allows national pension funds, sovereign funds, and other sovereign investors from IFC’s shareholder countries to co-invest in IFC transactions in the regions. KIC invests in private equity on a global scale, considering investments in a broad range of fund types and industries.

Board of Regents, State of Iowa has also expanded its target allocation to private equity funds. The USD 2.1 billion Iowa-based endowment revealed in March that it has increased its target allocation to private equity from 5% to 10% of total assets following an asset allocation review and on the advice of general consultant, Wilshire Associates. The endowment plan, which typically invests in the asset class through commitments to funds of funds and looks to diversify its portfolio by vintage year, has 5% of total assets currently allocated to private equity investments and recently invested USD 7 million in Adams Street Partners 2010 Partnership. Other fund managers in the endowment’s portfolio include Commonfund Capital and NB Alternatives.

Other LPs that have recently revealed an increase in their allocation to private equity include Yale University Endowment, which revealed in a recent report that it had increased its target allocation from 21% to 26% of total assets in June 2009 in anticipation of an increase in its exposure to private equity.

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