Fully funded with affiliate capital...Managed by KB Asset Management
Rapid deployment into mega projects such as the "Yongin Semiconductor Cluster"
KB Financial Group announced on the 19th that it will establish a large-scale infrastructure fund of about 1 trillion won by pooling the group’s investment capabilities. This move is intended to channel private capital into the field of productive finance in line with the government’s “Five Mega Regions and Three Special Self-Governing Provinces (5G 3S)” development strategy, and to contribute to securing new growth engines for the Korean economy, balanced regional development, and job creation.
The newly created “KB Kookmin Growth Infrastructure Fund” has been set up to stably support national strategic infrastructure projects and to serve as a catalyst for private investment, in line with the government’s 150 trillion won National Growth Fund initiative, which is beginning full-scale capital deployment starting with the Shinan-Uui offshore wind power generation project.
KB Financial has concentrated the group’s capital strength and long-term investment and management capabilities in the fund. Major affiliates such as KB Kookmin Bank, KB Insurance, and KB Life Insurance will participate as limited partners, with the entire 1 trillion won to be raised from group capital. Fund management will be handled by KB Asset Management, whose expertise has been recognized through its management of the “Balhae Infrastructure Fund,” the first homegrown listed infrastructure fund in Korea.
In particular, this fund has adopted a “perpetual closed-end infrastructure fund structure,” for which the Financial Services Commission and the Korea Accounting Standards Board clarified accounting standards in August last year. By adopting a non-redeemable, perpetual structure with no maturity, it reduces the burden of recognizing valuation gains and losses in current earnings and thereby mitigates profit and loss volatility arising from large-scale, long-term investments. KB Financial expects it to become a best-practice investment model that will invigorate long-term private investment in national key industries.
On the 9th of last month, construction was bustling at the construction site of the Yongin Semiconductor Cluster General Industrial Complex in Wonsam-myeon, Cheoin-gu, Yongin, Gyeonggi Province. Photo by Yonhap News
The main investment targets are domestic infrastructure development, construction, and operation projects, including: (i) social overhead capital for balanced regional growth (transportation, environmental and social infrastructure, MICE industry, etc.); (ii) digital infrastructure (AI data centers, AI computing centers, etc.); (iii) energy infrastructure (district energy for semiconductor clusters, energy expressways, etc.); and (iv) the great transition to renewable energy (solar and wind power generation, hydrogen fuel cells and power generation, etc.).
In particular, this fund will include the “Yongin Semiconductor Cluster District Energy Project,” one of the mega projects under the National Growth Fund, as a core investment asset. This reflects an intention not only to announce a large fund size, but also to accelerate the actual pace of investment execution.
Going forward, KB Financial will pursue stable investments across infrastructure such as energy and basic facilities that are necessary to support structural upgrades in national industries and to enhance the growth and competitiveness of regional industries. In connection with the 5G 3S development strategy, it plans to focus investment on improving local infrastructure and expanding new social overhead capital, thereby helping to revitalize regional economies and create high-quality jobs favored by young people.
A KB Financial official said, “It is highly meaningful that we have established a structure that allows us to stably operate a single 1 trillion won fund over the long term by bringing together the group’s unrivaled infrastructure investment know-how and the investment and management capabilities of major affiliates,” adding, “We expect this fund to serve as a catalyst for full-scale, long-term investment by the financial sector in the SOC field.”
The official continued, “KB Financial will continue to do its utmost to fulfill the essential role of finance, not only by enhancing the competitiveness of advanced strategic industries, but also by enabling local regions, small and medium-sized enterprises, and young people to grow together.”
Meanwhile, KB Financial will supply a total of 93 trillion won in productive finance by 2030, redirecting capital flows toward productive sectors. The capital will be deployed in two categories: investment banking and strategic industry financing (corporate lending). The 25 trillion won investment banking portion will consist of 10 trillion won for the National Growth Fund and 15 trillion won for the group’s own investments. The 68 trillion won corporate lending portion will be supplied to advanced strategic industries and promising growth companies.
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