Invest1 publisher3 min readPublished
Korea Investment Signs Three MOUs With Global Partners; Data Centers Top Investors' Questions
Kim Sung-hwan told Korean reporters in Manhattan that data centres were the question overseas investors raised most often, and he came back from London and New York with agreements from Fidelity International, PIMCO and Carlyle.
The Investor · Invest desk
What happened
- Kim Sung-hwan, chief executive of Korea Investment & Securities, told Korean correspondents at a Manhattan briefing on the 10th that data centres were the topic investors raised most often at the firm's IR events.
- The firm signed a business agreement with Fidelity International in London on the 7th, then two days later teamed up with PIMCO and Carlyle in New York on the 9th.
- Kim attributed the interest to his firm's top market share in related financing and to the roughly threefold expansion of South Korea's stock market over the past year.
- He said the firm will likely need to adjust maturities and widen its hedging around Federal Reserve meetings, Bank of Korea policy board meetings and inflation and employment data.
- Korea Investment & Securities won the industry's first investment management account approval last November, and Kim said it is considering expanding products that pay monthly dividends or interest.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- decision If offshore partners supply the debt and the equity, Korea Investment's job in Korean data centres is origination and distribution for fees, and its own capital stays committed to its bond portfolio and its IMA book.
- exposure One rate path now runs through both sides of the firm's business: the yields that mark down its existing bond holdings also set the coupon a Korean data centre must pay a buyer like PIMCO.
- capability Domestic appetite for monthly income gives the firm somewhere to place exposure it originates with offshore partners, so a project financing can be sold on to Korean savers as a coupon product.
- precedent A Korean broker collecting three global names on one trip means the next Korean data centre financings get shown to offshore debt and equity buyers first, and domestic arrangers will be quoting against those bids.
Korea Investment & Securities describes PIMCO as a bond specialist, Carlyle as a private equity firm and Fidelity International as a global asset manager [5][6]. Between them that covers the debt and the equity a data centre needs. Kim said the proposals came to him: "We received many proposals to raise funds together, on the view that we will all be living in the AI era anyway" [4]. Raising funds together puts offshore capital into vehicles a Korean broker originates, and fee income with the originator.
What was signed is not capital. "During this trip we signed agreements with more global partners, not just the three companies we signed memorandums of understanding with," Kim said [8]. The report does not include a fund size, a closing date or a named Korean project [20].
The question running the other way was about the country. "Investors asked us whether Korea isn't in a very good position, given that it has two large semiconductor companies as well as defense firms," Kim said [9].
The rate cycle cuts against the same trade. "We manage a sizable bond portfolio of more than 40 trillion won, and when rates rise, prices become unattractive and the chance of losses grows," Kim said [11]. Data centre paper is long-dated. The yields marking down a 40 trillion won book also set the coupon a Korean project has to pay a buyer like PIMCO. On the path itself Kim was plain: "Even the big shots on Wall Street cannot speak definitively about monetary policy" [12].
The domestic end is retail income. "As rates have risen recently, domestic clients have shown a stronger preference for products that pay monthly dividends or interest, so we are thinking of expanding them," Kim said [15]. A portfolio of project loans is one of the things that can be wrapped into a monthly coupon.
I would expect the debt to close before the equity, because PIMCO buys bonds and new paper prices more easily in a rising-rate market than old paper does, while an equity cheque waits on a site and a tenant. The counter-thesis is that memorandums cost nothing. KIS Night has run annually since 2024 in New York, London and Hong Kong [17], which makes this the third round [22], and the thing that would show Korean data centres are genuinely fundable offshore is a vehicle with a size and a first close naming one of the three. Kim put his own ambition lower than that: "U.S. financial institutions are incomparably larger than we are, so rather than competing with them right now, our first goal is to build cooperative relationships around know-how, capabilities, philosophy and research" [18].
What to watch
- A first close, with a size, on any Korean data centre vehicle naming Fidelity International, PIMCO or Carlyle as an investor.
- Whether Korea Investment publishes the measure behind its claimed top market share in data centre financing, and whether it counts arranged volume or held risk.
- The maturity and hedging changes Kim said the firm would make around the next Federal Reserve and Bank of Korea meetings.