Shinhan Capital SI Finance Headquarters 'Connect Fund 1 & 2' Fund
Decides to Move to Existing VC After Considering Physical Division CVC
[Asia Economy Reporter Kwangho Lee] Shinhan Financial Group will transfer a strategic fund worth 600 billion KRW to Shinhan Venture Investment, the group's affiliated venture capital (VC). If this process proceeds smoothly, Shinhan Venture Investment's assets under management (AUM) will increase to the 2 trillion KRW range.
According to the investment banking (IB) industry, Shinhan Financial Group will transfer the 'One Shinhan Connect New Technology Investment Association No.1 (Connect Fund No.1)' and 'One Shinhan Connect New Technology Investment Association No.2 (Connect Fund No.2),' currently managed by Shinhan Capital SI Finance Headquarters, to Shinhan Venture Investment. The total committed amount of the funds is 300 billion KRW each, totaling 600 billion KRW.
Connect Fund No.1 and No.2 are the first digital strategic investment (SI) funds by a domestic financial company. Shinhan Venture Investment is preparing to establish a separate investment headquarters to manage these two funds. This investment headquarters will be led by personnel from the group, not the existing VC staff. The head of this headquarters is expected to be revealed in the Shinhan Bank personnel announcement on the 18th.
Shinhan Capital SI Finance Headquarters was established in 2021. It was created to strengthen the group's core digital capabilities by investing in promising ventures, startups, and prospective unicorn companies. It has been responsible for discovering new businesses while managing strategic funds. The organization was led by Head Sanghoon Jung, who is from Shinhan Bank. It has discovered promising startups such as Ballanpoti, Tudot, and Why Not.
Previously, Shinhan Financial Group considered spinning off Shinhan Capital SI Finance Headquarters to establish a corporate venture capital (CVC). The strategy was to differentiate it from the existing venture capital, Shinhan Venture Investment, by making the SI Finance Headquarters a group CVC dedicated to managing digital strategic funds.
The industry anticipated that Shinhan Financial Group's strategic fund could create business synergies with corporate finance and other IB sectors while also securing financial gains, making the launch of an independent CVC quite feasible. There was attention on whether new investment vehicles such as Shinhan Investment, besides Shinhan Venture Investment, would emerge.
However, ultimately, Shinhan Financial Group decided to transfer the existing strategic funds to Shinhan Venture Investment, an existing startup investment company, rather than establishing an independent corporation. Since not only the funds but also the personnel managing the funds will be transferred, significant changes are expected.
Shinhan Venture Investment's assets under management stood at 1.3953 trillion KRW as of last year. It secured a position among the top 10 in the industry, solidifying its status as a major venture capital firm. It expanded its scale based on group funds. With the addition of the strategic funds, the AUM will reach 2 trillion KRW. Considering that new fund formations are currently underway, the scale of assets under management is expected to grow even further.
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