Eyes on 'Sobu-jang', the Hot Spot for Motefund's Ad Hoc Investments

"Low Risk and High Value-Up Potential" Evaluation
Competition Among InterValue, High Investment, and JX Partners for One GP Position

[Asia Economy Reporter Kwangho Lee] Among the 57 asset management companies that challenged the 'Mothe Fund June Ad Hoc Investment Project (under the Ministry of SMEs and Startups),' 23 passed the first hurdle of document screening. In particular, attention is focused on the results of the 'SoBuJang (Materials, Components, and Equipment)' sector, the fiercest battleground in this investment project.

Korea Venture Investment recently announced the results of the ad hoc investment project document screening. After the second review, including presentations (PT), 10 of these will be finally selected as General Partners (GPs). The most competitive sector in this investment project was the SoBuJang sector, which recorded a competition rate of 11 to 1.

Various asset management companies such as Medici Investment, Bridgepole Investment, BM Ventures, Icequare Ventures, S Ventures, S&S Investment, InterValue Partners, JX Partners, K&Investment Partners, P&P Investment, and Hi Investment Partners threw their hats into the ring.

The candidate pool was narrowed down from 11 to 3. The asset management companies that passed the document screening in the SoBuJang sector are InterValue Partners, Hi Investment Partners, and JX Partners. They are currently engaged in a final competition for one General Partner (GP) position.

In particular, JX Partners applied for the SoBuJang sector in the first regular investment round in 2021 but was not selected as a final GP. They challenged again in the first regular investment round in 2022 but faced defeat once more. They have been persistently knocking on the door of the SoBuJang sector. Attention is focused on what kind of results they will receive this time.

The policy funds allocated to the SoBuJang sector in this ad hoc investment project amount to approximately 8.5 billion KRW. Despite the relatively small amount of funds allocated, the largest number of asset management companies gathered. Looking at the profiles of the applying companies, some are closely related to SoBuJang, while others are not. This suggests that policy funds are desperately needed.

The recent market sentiment is also reflected. When liquidity was abundant, investments were often made based on potential even without performance, but due to the global economic downturn, a conservative stance is spreading. Because of this, there is an increasing movement to invest in companies that generate actual performance. SoBuJang companies are evaluated as having relatively steady performance and lower risk compared to other sectors.

The main investment targets in the SoBuJang sector this time are ▲ startup companies, technology innovation-type and management innovation-type SMEs and venture companies engaged in the SoBuJang industry under the 'Special Measures Act for Strengthening the Competitiveness of the Materials, Components, and Equipment Industry' ▲ companies selected by the government as ‘Materials, Components, and Equipment Strong Small and Medium Enterprises 100’, ‘Materials, Components, and Equipment Startup 100’, and companies recommended by the Large and Small Business Win-Win Council. More than 60% of the total committed amount must be invested in companies meeting these conditions.

A venture capital official said, “Besides asset management companies focusing on so-called technology-based companies, many asset management companies have gathered, which means policy funds are desperately needed.” He added, “Especially among the SoBuJang candidates this time, one company must feel like it is on the edge of a cliff as it has not been able to form a new fund since 2019.”

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