On May 14, the ministry, in collaboration with Korea Venture Investment Corp., discussed the "2027 Fund of Funds Investment Strategy and Disclosure System Implementation Plan," presenting a detailed roadmap.
The key to this innovation is "information transparency." The ministry plans to publicly disclose major operational indicators of the fund of funds to enhance trust in its policy fund management.
Previously, metrics such as liquidation returns and success stories of invested companies were shared only within the industry. Now, these will be visualized and made accessible to the public in an easily understandable format. This aims to demonstrate to private investors that the fund of funds is generating substantial returns and achievements beyond mere financial support, thereby encouraging private capital inflow into venture funds.
Since its inception in 2005, the fund of funds has invested 17 trillion won (approximately $15 billion), creating a total of 50 trillion won (about $38 billion) in sub-funds and investing in over 110,700 innovative startups. As of last year, the funds that have completed liquidation recorded an average annual return of 8%. According to the ministry, about 87% of domestic unicorn companies have received investments from the fund of funds, and in the past five years, 82% of companies listed on the KOSDAQ through technology special listings were funded by it.
The size of the fund of funds has been steadily increasing. Last year, Korea Venture Investment Corp. contributed 2.22 trillion won, leading to the establishment of 4.47 trillion won in venture funds, which resulted in a total investment of 3.99 trillion won. This year, the ministry plans to invest a record 2.6 trillion won to support the growth of next-generation unicorns, regional businesses, cultural and tourism ventures, intellectual property, and biotechnology startups.
Additionally, the ministry has taken the lead in expanding the regional venture investment ecosystem. It has established a dedicated regional investment fund worth 1.8 trillion won and invested in over 600 regional innovative companies. Funds that have been liquidated in the past five years have shown a respectable return of over 11%.
Moving forward, the ministry aims to accelerate the establishment of the newly created "LP Growth Fund" to encourage participation from institutional investors, including pension funds, financial institutions, and industry players. Together with around 25 institutions, it plans to create a total of 850 billion won in sub-funds.
Han Seong-sook, Minister of SMEs and Startups, stated, "Over the past 20 years, the fund of funds has played a crucial role in discovering promising startups and nurturing them into unicorn companies, significantly contributing to the growth and development of the venture investment market. We will strengthen our role as a catalyst for venture investment by promoting collaborations with relevant ministries to create big tech companies, expand the regional investment ecosystem, and attract private investment."
* This article has been translated by AI.
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