FACTBOX-S.Korea sovereign fund to invest $2 bln in Merrill

SEOUL Jan 16 (Reuters) - Korea Investment Corporation is buying $2 billion worth of new preferred shares in Merrill Lynch MER.N, its debut in joining the ranks of sovereign wealth funds buying into subprime mortgage-hit Wall Street banks.

The investment by the government-owned fund is part of $6.6 billion that Merrill is raising in fresh capital from a group that includes U.S., Japanese and Kuwaiti investors.

Following are key facts on KIC and its assets.

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* Established in July 2005, modelled after the Government of Singapore Investment Corporation Pte Ltd (GIC), with the goal of boosting investment returns on growing foreign reserves and other public funds.

* Assets under management: $20 billion, mostly from South Korea's foreign exchange reserves and the remainder from the Finance Ministry.

* Finance Ministry pledged to entrust additional $10 billion to the KIC in 2008.

* Aims to expand total investment assets tenfold to $200 billion by 2015.

* Has invested mostly in foreign currency-denominated bonds and stocks, and plans to boost investments in equities and other non-bond assets.

* Guan Ong, a former Prudential International Investments' global chief investment officer, leads KIC's investment teams.

* With the investment in Merrill, KIC will earn an annual 9 percent dividend in the next two or three years, before converting them into common shares, equivalent to a more than 3 percent stake in the U.S. bank. RELATED STORIES: > Kuwait, Alwaleed throw Citi, Merrill lifeline [ID:nL16401685] > Citi, Merrill raise capital but shares tank [ID:nN15530718] > Alwaleed comes to Citi rescue for second time [ID:nL15816790] > NJ joins big players with Citi,Merrill stakes [ID:nN15511543] (Reporting by Kim Yeon-hee; Editing by Valerie Lee)