Korea Growth Investment, Shinhan, and Woori Selected as Indirect Investment Managers for the National Growth Fund

Citizen-Participation Fund to Launch as Early as Late May

The Financial Services Commission announced on February 26 that three firms have been selected as fiscal fund-of-funds managers to oversee 450 billion won of government capital to be injected into the indirect investment segment of the National Growth Fund: Korea Growth Investment Corp., Shinhan Asset Management, and Woori Asset Management.

The asset managers selected by Korea Development Bank will manage 450 billion won in government capital out of the 7 trillion won allocated to the indirect investment segment of the National Growth Fund. The amounts under management are as follows: 210 billion won for Korea Growth Investment Corp. (120 billion won for the citizen-participation tranche and 90 billion won for the general policy fund), 160 billion won for Shinhan Asset Management (general policy fund), and 80 billion won for Woori Asset Management (ultra-long-term technology investment).

Under the indirect investment model, instead of fiscal resources or the Advanced Strategic Industries Fund investing directly, private professional investors with specialized investment capabilities are selected and they, in turn, invest in companies. In this process, the fiscal fund-of-funds, together with Korea Development Bank, manages and supplies government capital and serves as a catalyst to attract private capital inflows. Based on 450 billion won in fiscal resources and 1.5 trillion won from the advanced industries fund this year, the government plans to attract more than 5.5 trillion won in private capital.

The fiscal fund-of-funds managers selected this time will jointly select sub-fund managers with Korea Development Bank and establish the policy objectives and investment guidelines that these sub-funds must follow. Through this, the National Growth Fund plans to leverage the expertise of private-sector professionals to identify promising companies and to ensure a smooth flow of capital into advanced industries, which are national strategic sectors.

For the citizen-participation fund, in which ordinary citizens invest, the authorities plan to select public offering fund managers to raise capital in March and to select sub-fund managers by April. After consultations on sales channels, products will be launched between late May and June. The target amount is 600 billion won, and including subordinated government capital, the total will reach 720 billion won.

For the general policy funds, sub-fund managers will be selected in June and August, after which those managers will raise capital from institutional investors. The funds are expected to be deployed to the industrial sector as early as the end of the year.