South Korea will intensify monitoring of investments by domestic pension funds and banks in overseas private debt, the country's financial watchdog said, amid rising global concerns about private credit funds.
The outstanding balance of private credit investments by Korean pension funds surged 55.3% to 25.4 trillion won ($16.86 billion) as of end-February from 16.3 trillion won in 2023, according to the Financial Supervisory Service (FSS).
Local financial institutions had about 30.5 trillion won in exposure to private debt as of February. Most exposure was in U.S. and European debt.
Global regulators are tightening scrutiny on the $3.5 trillion private credit industry.
The FSS said investment risk remains at a "manageable level" with low liquidity risks.
