1.08 Tril. Won to Be Put into Fund of Funds
The eight ministries including the Ministry of SMEs and Startups, the Ministry of Culture, Sports and Tourism and the Ministry of Science and ICT are planning to raise 81 venture funds worth a total of 2,479.8 billion won by making a fund-of-funds investment of 1,084.1 billion won. The size of the 81 venture funds to be raised within this year has been increased from the previous target of 2,222.5 billion won. In addition, it exceeds the size of last year’s venture funds, 2,413 billion won.
According to the Ministry of SMEs and Startups, four relatively large funds, worth at least 100 billion won each and 586 billion won in total, have been prepared this year so that sizeable financing is available for firms in their non-early growth stages. The funds are expected to contribute to the South Korean government’s K-Unicorn Project scheduled to be put into full operation this year.
The 81 venture funds are subject to the government’s latest venture investment promotion measures. Specifically, the fund of funds will temporarily bear investment losses for every fund investment executed by 20 percent or more within this year and incentives will be provided in relation to management fees and so on. In addition, fund management firms can register funds and start their investment even with just 70 percent of the funds on condition that the rest is obtained within three months.
The funds include 38 for startups (705.1 billion won) and 13 for startup growth assistance (1,272.5 billion won) prepared by the Ministry of SMEs and Startups. The private investment in the funds for startup growth assistance, introduced for the first time this year, exceeded the target value of 950 billion won.
A total of 17 funds (336.4 billion won) will be prepared in the fields of culture content, tourism and sports. The Ministry of Science and ICT raised two digital content funds (32.1 billion won) in relation to immersive content development. The Ministry of Environment is going to raise two funds (35.4 billion won) for investment in green technologies and industries, particulate matter reduction, etc. The Ministry of Oceans and Fisheries is planning to raise two funds (30 billion won) this year for investment in marine equipment, marine leisure and tourism, etc. The Ministry of Land, Infrastructure and Transport’s fund (17 billion won) will be invested in venture firms engaged in construction and civil engineering.
The Ministry of SMEs and Startups said that the second fund-of-funds investment project would be launched in the near future. In that project, the Korean Intellectual Property Office, the Ministry of Health and Welfare, the Ministry of Culture, Sports and Tourism, the Ministry of Oceans and Fisheries and the Ministry of Science and ICT are expected to invest 83.5 billion won to raise funds worth 330 billion won.