Industrial Bank of Korea Forms 400 Billion KRW Small-Medium Materials and Components Fund... Selects Entrusted Management Company

Establishment of a Fund Exceeding KRW 400 Billion through KRW 220 Billion in Fiscal and Policy Capital Investment

Focused Investment in Companies Operating in the Materials, Parts, and Equipment Industry to Strengthen Competitiveness

[Asia Economy Reporter Jo Gang-wook] Korea Development Bank (KDB), together with Korea Growth Investment Corporation, is establishing a dedicated fund worth KRW 400 billion for the materials, parts, and equipment (MPE) sector and is seeking entrusted fund managers to operate it.

On the 8th, KDB announced that on the 7th it had publicly announced the investment project for the MPE dedicated fund to support smooth investment in the materials, parts, and equipment industry in cooperation with Korea Growth Investment Corporation.

This fund will focus on investing in the MPE industry, which urgently needs to break away from an externally dependent industrial structure, and will be established by dividing it into a blind fund and a project fund.

The blind fund will be raised to over KRW 200 billion, using KRW 120 billion in policy capital as seed money, including KRW 100 billion from fiscal funds and KRW 20 billion from KDB. The minimum fund size per fund is KRW 100 billion, and two fund managers will be selected. Proposals will be accepted until the 31st, with fund managers selected next month, and the fund will be established by July to begin full-scale investment.

The project fund will be raised to over KRW 200 billion with KRW 100 billion invested by the government. Proposals from about 10 fund managers will be accepted on an ongoing basis and selected through individual evaluations. The minimum fund size per fund will be determined considering the proposed amount and investment ratio.

KDB will lead the selection for the blind fund, while Korea Growth Investment Corporation will handle the project fund.

Incentives will be provided to private investors in the fund, including the transfer of a portion of excess returns (up to 20%) from fiscal investment or compensation for part of the fund losses (up to 20% of the invested principal).

Lee Dong-gull, Chairman of KDB, said, "Through this fund, we hope to supply sufficient venture capital to excellent companies operating in the materials, parts, and equipment industry, thereby qualitatively advancing our economy." He added, "By fostering domestic companies in the MPE industry, which has long depended heavily on overseas sources, we will fundamentally break away from high dependence on specific countries and create an industrial ecosystem for a manufacturing powerhouse that covers everything from core materials and parts to finished products."

This content was produced with the assistance of AI translation services.