The master-feeder “business structure innovation fund” will be launched in the first half of next year to change the corporate restructuring frame from the government-centered to market-centered. Based on this, more than 1 trillion won (US$918.7 million) of venture capital will be injected into the restructuring market to encourage companies to show an innovative growth.
The Financial Services Commission announced that eight banks – Korea Development Bank, Industrial Bank of Korea (IBK), Export-Import Bank of Korea, Woori Bank, Nonghyup Bank, KEB Hana Bank, Kookmin Bank and Shinhan Bank –, Korea Asset Management Corporation and K-Growth signed a memorandum of understanding on December 18 to invest 500 billion won (US$459.35 million) in the master fund of the business structure innovation fund by the end of the first half of next year.
The 500 billion won (US$459.35 million) will be injected into the master fund through a “capital call.” A capital call is the right a venture capital firm has, once it has decided where it would like to invest, to "call" or "draw down" the money committed to the fund by the investors.
In addition, the government will attract over 500 billion won (US$459.35 million) for the feeder fund from private investors to create a minimum of 1 trillion won (US$918.7 million) of investments. The size of fund will be decided by regularly evaluating operability in the future.