IBK, Launches Private Equity Fund Worth 140 Billion KRW Investing in Business Restructuring Companies

IBK, Established Blind Fund with Kiwoom PE Last Month
Investing in SMEs and Mid-sized Companies Transitioning to Future Industries

[Asia Economy Reporter Song Seung-seop] IBK Industrial Bank of Korea has established a private equity fund to invest in companies undergoing business restructuring. This move is interpreted as aligning with the policy direction of fostering core industries and corporate innovation.

According to the financial sector on the 15th, IBK Industrial Bank of Korea completed the establishment of a blind fund with the private equity firm Kiwoom Private Equity (PE) at the end of last month. A blind fund is a fund that raises capital without pre-selecting investment targets and invests money once promising investment opportunities are secured. The target fundraising amount was 150 billion KRW, and it succeeded in securing 145 billion KRW in investments.

The investment targets are ‘business restructuring companies.’ These are companies that have plans to significantly improve productivity or are pursuing innovation by entering promising industries and adopting new technologies. Specifically, these are excellent small and medium-sized enterprises (SMEs) and mid-sized companies transitioning to future industries in response to recent changes in the industrial environment. Investment themes include eco-friendly, carbon neutrality, digital transformation, healthcare, and next-generation displays. Companies requiring overseas expansion, research & development (R&D), or facility investment can also receive investments.

The raised funds will be injected by acquiring equity stakes in business restructuring companies. When the value of the grown companies increases, the funds will be recovered through an initial public offering (IPO). Depending on the situation, mergers and acquisitions (M&A) of the invested companies will also be conducted to recover the funds.

This decision by IBK Industrial Bank of Korea is analyzed to be related to recent government policies. The Yoon Seok-yeol administration included plans related to business restructuring in its 110 national tasks. It intends to intensively support the entry into new industries through proactive business restructuring of companies operating core industries. Regarding policy finance, it also announced plans to shift to a demand-oriented approach to support market-complementary sectors.

During the Moon Jae-in administration, the ‘Comprehensive Support Plan Guide for Business Restructuring Companies’ was issued in 2020, promising policy fund exceptions and fund investments as incentives. The plan also included the establishment of new funds and the use of Korean New Deal funds to resolve the financial difficulties of these companies. IBK Industrial Bank of Korea was included as a financial support institution participating in the ‘Business Restructuring Support Council.’

On April 22, IBK Industrial Bank of Korea’s board of directors passed the agenda for fund establishment and investment, specifying the business purpose as "to respond to proactive and voluntary corporate restructuring policies and to fulfill a responsible role as a policy finance institution."

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