Shinhan Venture Investment to Establish 'Early-Stage Investment Only' Blind Fund

Shinhan Bank Invests as Anchor LP
An Unusual Move Targeting Early Stage

[Asia Economy Reporter Kwangho Lee] Shinhan Venture Investment is forming a blind fund exclusively for early-stage investments. This move aims to serve as a growth catalyst for promising early-stage startups amid a frozen venture investment market. Attention is now focused on the future portfolio.

According to the investment banking (IB) industry on the 23rd, Shinhan Venture Investment is currently raising a new blind fund worth 33 billion KRW. This fund plans to utilize only private capital without any policy funds such as the Korea Fund of Funds. The anchor limited partner (LP) is Shinhan Asset Management. Except for the management company's mandatory investment (GP commit), most of the funds are provided by Shinhan Bank.

The lead fund manager is Manager Seunghyun Kim from VC Division 2. He graduated from Korea University with a degree in law and worked at KAIST Youth Startup Investment Holdings, a subsidiary of the Korea Advanced Institute of Science and Technology (KAIST). He is also a founding member of Base Investment, a venture capital (VC) firm established in March 2019 by Shin Hyun-sung, founder of Ticket Monster and chairman of TMON, and Kang Jun-yeol, former Chief Service Officer (CSO) and Vice President of Kakao.

Last year, Shinhan Venture Investment recruited Manager Kim to strengthen its early-stage investment capabilities. With his strength in early-stage investments, the company aimed to execute more meticulous investments at each growth stage. Although it has secured a diverse portfolio through several blind funds so far, it is expected to adopt a strategy of selection and concentration by increasing dedicated funds going forward.

The reason Shinhan Asset Management took the role of anchor LP lies in Shinhan Financial Group’s startup nurturing platform, ‘Shinhan Square Bridge.’ It helps create a virtuous cycle of ▲discovering ▲growing ▲global expansion of startups with innovative technologies within a single space.

Until now, investments were reviewed by venture investment departments of affiliates such as Shinhan Bank, Shinhan Capital, and Shinhan Asset Management. However, after acquiring Neoplux (now Shinhan Venture Investment), the group is interpreted to be increasing investments in a venture capital (VC) affiliate specialized in venture investments to secure portfolios more efficiently.

This trend continues. Last month, Shinhan Venture Investment formed the Shinhan Global Flagship Investment Association No. 1, an overseas venture fund worth 200 billion KRW. Major affiliates of Shinhan Financial Group jointly invested. The purpose is to strengthen the group’s digital business capabilities by investing in excellent digital companies located in countries where Shinhan Financial Group affiliates have expanded.

In this way, Shinhan Venture Investment is forming new funds by smoothly securing capital through Shinhan Financial Group despite the tightening of private funds. However, some raise questions about investment autonomy. Since the fund is created with a purpose based on group funds, there are concerns that individual investment officers’ authority may be weakened.

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