South Korea and ADIA Form Strategic Partnership

(March 29, 2011) — South Korea has partnered with the Abu Dhabi Investment Authority (ADIA), owned by the United Arab Emirates (UAE), for joint investments.

The partnership signifies closer relations between South Korea and the UAE, and reflects opportunities for South Korea’s state-run funds such as the National Pension Service (NPS) and the Korea Investment Corp (KIC) to exert greater influence in the global financial market. “Both nations agreed to step up efforts to support each other’s state-run funds to make better investments,” an official at the Presidential Council for Future & Vision told Reuters. “For example, if the UAE wants to invest in East Asia and yet lacks information, Korea’s sovereign fund could help or jointly invest,” he said.

The deal will permit ADIA to invest through a local brokerage in South Korea.

The cooperation between South Korea and ADIA mirrors moves by Korea’s National Pension Service, the world’s fifth-largest pension fund. In October, NPS, which has around $269 billion in assets, said it would strengthen its relationship with ADIA to boost its overseas investments. That same month, the Korean pension also reported aims of increasing its overseas allocation by investing $400 million in the Asian and Australian real-estate markets, and revealed plans to expand its exposure to alternative assets, including real estate, to more than 10% of its assets by 2015.