The Korea Venture Capital Association (VC Association) announced on the 29th that “on the previous day, a policy forum titled ‘Issues and Tasks for Retirement Pension Investment in Venture Funds’ was held at the National Assembly Members' Office Building, Conference Room 2, hosted by Song Eon-seok, a member of the People Power Party and chairman of the National Assembly Planning and Finance Committee, and organized by the VC Association.”
Yoon Geon-su, Chairman of the Korea Venture Capital Association, is speaking at the policy discussion on "Issues and Tasks for Venture Fund Investment of Retirement Pensions" held on the 28th at the National Assembly Members' Office Building, Conference Room 2. Provided by Korea Venture Capital Association
At this forum, measures to invest retirement pensions in venture funds were discussed to improve the returns of retirement pensions and revitalize the venture investment ecosystem. Several lawmakers, including Kim Seong-hoon (Chairman of the Policy Committee), Na Kyung-won, Kwon Seong-dong, and Cheon Ha-ram, floor leader of the Reform New Party, all from the People Power Party, attended and graced the event.
In his opening remarks, Representative Song Eon-seok stated, “With aging society, it is necessary to consider an operational strategy that balances the stability and profitability of retirement pensions. As one of the outcomes, this forum was organized to discuss the venture fund investment plan, and based on this, we will work together to prepare alternatives for the development of the retirement pension system.” Yoon Geon-su, president of the VC Association, said, “Principal protection must consider both inflation and money supply growth, but the current retirement pension returns are below the inflation rate, so investing in venture funds can dramatically improve returns”.
Nam Jae-woo, senior research fellow at the Korea Capital Market Institute, who presented on the topic of ‘Pension Asset Management and Venture Investment,’ suggested that to enhance retirement pension returns, it is necessary to increase the proportion of alternative investments to build an efficient investment portfolio, and venture investment can be used as one of the means.
Kim Jong-sul, executive director of the VC Association and a panelist, emphasized that the venture investment returns of pension funds and mutual aid associations mostly exceed 10%, and the returns of the Korea Fund of Funds over the past 10 years have also recorded over 9%, indicating that venture investment maintains more stable returns than public perception. Yoo Seung-woon, CEO of Stonebridge Ventures, also explained the profitability of the venture investment industry from the perspective of an asset management company with long-term investment experience, stating that risks can be reduced through proper diversification and expert management.
Professor Kim Jae-hyun of Sangmyung University pointed out the limitation that individuals or individual workplaces directly manage retirement pension assets, resulting in a high proportion of low-return principal-guaranteed products. He explained that, on the premise of enhancing the responsibility of retirement pension providers, venture funds could become a feasible investment target if they enter in the form of publicly offered fund-of-funds.
Kim Bu-gyeong, director at the Ministry of Employment and Labor, the main government department related to the retirement pension system, acknowledged the policy stance prioritizing the stability of retirement pension subscribers and institutional limitations but stated that they would explore progressive measures, including the recent discussions on transitioning to a fund-type system. Lee Gwon-jae, director at the Ministry of SMEs and Startups, addressed concerns about the risks of venture investment by emphasizing the transparency of investment management status and performance disclosure, and mentioned plans to collect opinions from companies subscribing to retirement pensions and retirement pension providers starting next year.
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