FSC Announces Start of National Growth Fund Manager Applications Today

Fiscal Mother Fund Manager Applications Open on January 15
Recruitment Period Runs Until February 5

The Financial Services Commission announced that it has begun accepting applications for National Growth Fund management companies through Korea Development Bank starting on January 15. The application period runs until February 5.

Last September, the government announced a plan to establish a 150 trillion won National Growth Fund over the next five years to provide comprehensive financial support for advanced strategic industries. This year, more than 30 trillion won will be supplied across the entire advanced industry ecosystem. Last month, through its business report, the Financial Services Commission also unveiled the first seven mega projects that the National Growth Fund will prioritize as investment targets.

The Financial Services Commission explained that this announcement is separate from the first mega projects and is intended for indirect investment. Indirect investment involves the creation of large-scale funds jointly by fiscal resources, the Advanced Strategic Industry Fund (Advanced Fund), and private capital, which are then used to make equity investments aligned with policy objectives.

This year, the plan is to use 450 billion won in fiscal resources and 1.5 trillion won from the Advanced Strategic Industry Fund as seed capital to attract more than 5.5 trillion won in private capital. Of the 450 billion won in fiscal resources, 330 billion won will be allocated to the “General Policy Fund,” which raises and manages institutional investor capital, and 120 billion won will be allocated to the “Public Participation Fund,” which is open to individual investors.

Funds that receive priority fiscal investment (Fiscal Mother Funds) will be divided into four categories: industry-wide support (160 billion won), scale-up/individual industry/regional support (90 billion won), ultra-long-term technology investment (80 billion won), and public participation (120 billion won), with a total of four management companies to be selected.

Management companies selected for the Fiscal Mother Funds through this announcement will, in addition to managing fiscal contributions, collaborate with Korea Development Bank to select sub-fund managers. Sub-fund managers for the General Policy Fund will be responsible for raising private institutional investor capital and identifying investment destinations for the pooled funds. Full-scale investments are expected to begin at the end of the year, once the private institutional investor capital has been secured.

The Financial Services Commission emphasized that the National Growth Fund will build on the achievements of previous policy funds (such as the New Deal Fund and the Innovation Growth Fund) while improving strategic investment decisions. Previous policy funds achieved meaningful results in attracting private capital and generating investment returns despite limited fiscal resources, but there were also areas for improvement, such as relatively small investment sizes per case (around 6 billion won) and insufficient long-term investment.

This time, an ultra-long-term technology investment fund of over 880 billion won (including fiscal resources) will be established to enable investments of 10 years or longer, and a project fund structure (where funds are provided in line with the management company’s proposals for pre-determined investment destinations and sectors) will be introduced to facilitate large-scale investments. Through dedicated scale-up funds (including 500 billion won in fiscal resources), the size of individual investments will also be increased. In line with the National Growth Fund’s key goal of balanced regional development, a dedicated regional fund (including 200 billion won in fiscal resources) will also be introduced.