Incoming World Bank’s director of the investment management division, Heung-sik Choo, said that the international financial institution, which manages $130 billion of assets, needs to review its current investment horizon and risk limit to cushion the impact of falling interest rates.
Choo, appointed as the director of the Washington-based lending institution’s investment management division in early June, told the Korea Economic Daily that record-low base rates of major economies and deepening economic volatility have put the World Bank in an even tougher position in asset management than before.
“To cope with a low interest rate environment, World Bank needs to put investment period and risk limit under review,“ he said in a recent interview, without further elaborating.
The World Bank employs defensive investment strategy, investing mainly in bonds and money market funds.
Choo served as the chief investment officer of sovereign wealth fund, Korea Investment Corporation (KIC) from March 2014 until early 2016. From August, he will take charge of running the World Bank’s capital and trust assets deposited from central banks of 57 countries to become the first Korean who leads asset management of an international financial institution.
By Chang Jae Yoo
<Edited by Yeonhee Kim>