South Korea, Russia to establish joint fund to boost investments

Fund announced by Russian President Vladimir Putin. South Korea and Russia agreed this week to establish a US$500 million joint fund with their sovereign wealth funds aimed at increasing cross-border investments in different companies and projects. The deal was announced by Russian President Vladimir Putin who was in South Korea earlier this week on an official visit. Under the agreement, Korea Investment Corporation and the Russian Direct Investment Fund will invest the same amount of money into companies or projects in both nations and invite private sector participation to boost the capital for joint projects. This move is expected to result in a positive return of investment and predictable cash flow. RDIF CEO Kirill Dmitriev said both sovereign funds are currently evaluating a number of joint projects in areas such as infrastructure and energy. He said that with the support of state-backed funds, Korean and Russian companies will feel comfortable when making investments. KIC had some US$64.5 billion in net assets in September while RDIF has US$10 billion in its fund. RDIF was established two years ago to make equity investments, mostly within Russia.