Korea Investment Corp. (KIC), the sovereign wealth fund managing South Korea’s foreign reserves, plans to sell private equity stakes worth over $1 billion. This decision follows a record annual return of 13.91% achieved by the fund in 2025, marking its strongest performance since its inception in 2005.
The sale is driven by the need to rebalance the portfolio. As of June 30, 2026, KIC’s public equity holdings were valued at approximately $52.66 billion. Rapid growth in public equity values often necessitates trimming private equity allocations to maintain target weightings, a strategy known as the reverse denominator effect.
KIC is part of a broader trend among institutional investors utilizing the secondary market to adjust their holdings. Similar actions were recently taken by Singapore’s GIC, which marketed $1 billion in stakes in August 2026, and the University of California system, which completed a $1 billion sale to HarbourVest Partners.
The fund has historically maintained a conservative portfolio strategy. Currently, KIC is strengthening ties with domestic asset managers to focus on global mergers and acquisitions, prioritizing the development of internal capabilities over relying solely on external fund managers.
The secondary market is expected to show significant interest in the KIC portfolio. Specialized firms such as Ardian, Lexington Partners, and HarbourVest have established dedicated funds to acquire such assets, which will likely lead to a competitive auction process for the stakes.
