South Korea’s Finance Ministry Holds Talks on Creating a Korean-Style Sovereign Wealth Fund

The Ministry of Finance and Economy at the Government Complex Sejong. [Photo by reporter Kim Yu-jin]

The government, which plans to draw up a plan in the first half of this year to launch a Korean-style sovereign wealth fund, convened a meeting Tuesday to gather views from related organizations.

Min Gyeong-seol, director general for innovative growth at the Ministry of Finance and Economy, held a roundtable at the Korea Fiscal Information Service with promising companies in strategic industries and officials from the Financial Services Commission, the Korea Development Bank and other agencies to discuss the direction for establishing the fund.

Participating companies shared their experiences and difficulties in raising investment during growth stages, saying large-scale, long-term investment conditions are needed for promising strategic-industry firms to develop into globally competitive companies.

Participants said the government has helped build a startup ecosystem through various policy funds and policy financing, but noted that most have been structured as funds premised on liquidation, limiting their role as patient capital. They expressed expectations for a sovereign wealth fund that would not require liquidation.

The Financial Services Commission, the Korea Development Bank and other agencies agreed that if existing policy financing and investment tools work in a complementary way with a Korean-style sovereign wealth fund, they could generate synergy in fostering strategic industries, supporting overseas expansion and building stable supply chains. They offered a range of policy suggestions on how to set up the fund.

Min said the fund would be “a new investment tool” that would grow as a long-term, stable partner through equity investments in promising strategic-industry companies, and “accumulate the resulting gains as national wealth to share with future generations.” He said the ministry will reflect views raised at the meeting to prepare an establishment plan within the first half of the year and proceed with follow-up steps, including submitting legislation to the National Assembly soon.

* This article has been translated by AI.

Yujin Kim