The Military Mutual Aid Association (MMAA) of Korea, with $6.8 billion of assets under management, will make new strategic investments in so-called "green-growth industries" this year, says Jin Yeong-Ho, chief investment officer of financial asset management.
"Green growth" is a new Korean national development theme, supported by the government and intended to spur growth and create jobs with green technology and clean energy.
The MMAA is one of four welfare-orientated credit-union entities in Korea, along with the Korea Teachers Credit Union, Public Officials Benefit Association and Police Mutual Aid Association. It was established in 1984 to ensure more stable livelihoods and welfare for its members, comprising both military service personnel and associated civilian employees. The MMAA now serves more than 170,000 members.
Jin, previously an employee at Prudential Korea, says MMAA's investments today are in three categories: construction and development (39.4% of total AUM), financial investments (38.2%) and direct-subsidiary equity investments (22.4%).
The MMAA has been traditionally noted for its strong focus on large-scale housing developments, construction and real-estate projects.
It will increase its financial investments to 42% and make new investments in green-growth industries up to 5% of its total AUM, while decreasing its staple investment area to 33%. The green-growth industry investments target emerging technologies and new growth projects including both domestic and overseas businesses.
In its financial-investments portfolio of $2.26 billion, the largest portion is in private-equity funds at 52.6%, while traditional stock and bond investments stand at 31.6%. Jin says the latter will increase to 34% by the end of 2010.
This year, there will be an additional $610 million of investment in this area, and the allocation will be to equity (20%), fixed-income securities (21%) and private-equity and public-equity stakeholdings (58%).
Jin says that there will be no change in the overseas-versus-domestic 85%/15% mix in its financial investment portfolio. Overseas investment projects include the Thames River water service project in the UK, as well as projects in China, Cambodia, Laos and Kazakhstan.