First Step Toward Creating 2.3 Trillion KRW in Industrial Innovation Capital
Parent Fund Established, Public Offering for Sub-Fund Managers Begins
The city of Busan has established the "Busan Future Industry Transition Fund No. 1" as a parent fund with a total of 55.1 billion KRW to advance regional industries and foster future growth sectors, and is now beginning full-scale operations.
This fund was launched just four months after the city announced its formation plan in February. Of the total, 50 billion KRW was contributed by a bank consortium fund dedicated to mid-sized companies, 4.1 billion KRW by the city of Busan, and 1 billion KRW by Korea Development Bank. The city has also worked with the Financial Services Commission to establish an institutional framework that reduces the financial sector's burden through subordinated investment.
Starting this year and continuing through 2033, the city plans to establish a parent fund of 55.1 billion KRW annually, match it with private capital, and sequentially create sub-funds totaling more than 250 billion KRW per year, aiming for a cumulative total of 2.3 trillion KRW in sub-funds.
The focus of this fund is to provide practical financial support to help traditional manufacturing industries such as shipbuilding and marine equipment, and automotive parts, overcome current crises and transition into advanced industries that integrate digital and eco-friendly technologies. Investments will be concentrated on field-oriented projects that improve corporate fundamentals, such as building smart factories, introducing carbon reduction technologies, and transitioning to future vehicle components.
The established parent fund will be managed by Korea Growth Investment Corporation, which will oversee the formation and post-management of sub-funds. The fund will be diversified into four sub-funds to expand its scale. The city plans to encourage the participation of local management companies when soliciting sub-fund managers and will offer incentives to attract capital region management companies to enter the local market.
The public offering for sub-fund managers will begin between July and August, with the goal of full-scale formation starting in September and selecting the "first investment company" within the year. To achieve this, the city has established a cooperative system with major financial institutions and corporate support agencies. The fund's investor relations event held in June attracted more than 200 participants, reflecting strong interest.
Park Hyungjoon, Mayor of Busan, stated, "This fund is a strategic tool to innovate the regional industrial structure and advance toward high value-added industries," adding, "We will create a virtuous cycle of local capital so that Busan can design its own future and drive innovation across the entire industrial ecosystem."
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