South Korean fund mulls $1B Bank of America stake sale -report

By VCPOST Staff Reporter

Jan 16, 2014 10:10 AM EST

Korea Investment Corp (KIC) will decide within a month if it will offload its $1-billion holding in Bank of America (BoA), according to Korean Economic Daily and other newspapers. The bank's value has fallen by half since 2008, wrote CNBC.

The sovereign wealth fund held a 0.69% stake in the American bank as of September 2013 through a $1-billion investment in Merrill Lynch. The said investment took place in 2008, before the Merrill Lynch-BoA merger. KIC currently manages around $66 billion worth of assets, the report detailed.

KIC has seen almost KRW1 trillion ($941 million) in losses on the BoA investment as share prices collapsed during the worldwide crisis. In 2011, however, the said stock started to rise, the report noted.

According to KIC Chief Executive Officer (CEO) Ahn Hong-chul, the company plans to invest more in alternative assets such as real estate. The Korean fund plans to up its investment allocation in the said assets from 8% to 30% of its total portfolio. Ahn also said the firm's total assets could reach the $100-billion mark by the end of this year, CNBC reported.

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