4 Selected from 8 Shortlisted Candidates
Each Investing 30 to 60 Billion KRW
Mid-sized VCs Receiving First Investments Draw Attention
[Asia Economy Reporter Kwangho Lee] The outline of the National Pension Service's (NPS) entrusted venture fund management companies (GPs) worth 150 billion KRW has been revealed. As expected, major venture capital (VC) firms have secured the winning positions, while a relatively young mid-sized firm was also selected as a GP, drawing attention.
According to the investment banking (IB) industry on the 1st, the NPS selected four institutions as venture fund GPs: KB Investment, SV Investment, Partners Investment, and BNH Investment. The NPS plans to invest a total of 150 billion KRW, allocating between 30 billion and 60 billion KRW to each of these four management companies. The scale of investment remains the same as last year.
The NPS will fill up to 40% of the total committed capital of each fund. For example, if the NPS invests 40 billion KRW, the respective VC must raise more than 60 billion KRW from external sources. Each VC is required to invest at least 2% of the total committed capital, with an investment period of 4 years. The fund maturity is within 8 years.
The target investment vehicles included venture investment associations under the "Act on Promotion of Venture Investment," new technology business investment associations under the "Specialized Credit Finance Business Act," and private equity collective investment vehicles specializing in startups and ventures under the "Capital Markets and Financial Investment Business Act," along with their managing general partners or managing members authorized to operate them.
Previously, eight VCs competed for the venture fund GP positions. The NPS shortlisted twice the number of candidates for review and due diligence. The shortlist candidates included KB Investment, SV Investment, Lindemann Asia Investment, BNH Investment, Daily Partners, Medici Investment, and Partners Investment.
The NPS restricted applications from existing GPs whose investment amounts did not exceed 60% of their committed capital. This was to prevent a specific management company from continuously receiving NPS investments. It was also a measure to encourage focus on managing a single fund rather than multiple funds.
This recruitment restriction proved effective. Large VCs that had already received NPS funds did not submit investment proposals, allowing mid-sized VCs to seize opportunities. As a result, various VCs beyond the major firms appeared on the GP selection shortlist.
Last year, SL Investment, Stonebridge Ventures, DSC Investment, and Mirae Asset Venture Investment were selected. They were ineligible to apply for this recruitment.
The industry is paying attention to BNH Investment, a bio-specialized venture capital. Among the current GPs, it has the smallest assets under management (AUM) but is recognized as a specialized house. Despite the downturn in the bio market, it has been steadily investing and over-closing new funds, demonstrating strong capabilities.
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