[Exclusive] Korea Venture Investment Launches First ESG Fund

First ESG Mother Fund Established... ESG Guidelines Applied for Investments
Smilegate Inve, Smilegate Group, and IBK Industrial Bank Contribute Funds

[Asia Economy Reporter Kwangho Lee] Following Korea Venture Investment's creation of the 'ESG Venture Investment Standard Guidelines' to strengthen investments in the Environmental, Social, and Governance (ESG) sector, the company has attracted attention by launching the first fund applying these guidelines. The investment portfolio is drawing interest.

According to industry sources on the 26th, Smilegate Investment has completed the formation meeting for the ‘IBK Smilegate ESG Fund No.1’ with a total committed amount of 20 billion KRW. The anchor investor (LP), the Korea Fund of Funds, contributed 10 billion KRW. In addition, the parent company Smilegate Group and IBK Industrial Bank of Korea also provided funding.

A Smilegate Investment official explained, “This is the first fund to be operated based on the ‘ESG Guidelines’ prepared by the Ministry of SMEs and Startups and Korea Venture Investment.”

According to the ESG venture investment guidelines, the fund must invest more than 60% in SMEs, venture, and startup companies practicing ESG management. It cannot invest in companies engaged in businesses considered negative from an ESG perspective, such as alcohol, gambling, and weapons-related industries.

The lead fund manager is Youngkwon Koo, who serves as the head of the Bio and Healthcare division. Director Koo focuses on investments in communication, media, tech, and biotech companies. He has discovered promising bio ventures such as Dongkoo Bio & Pharma, DND Pharmatech, and Alteogen.

In June, Korea Venture Investment selected Smilegate Investment as the entrusted operator (GP) for the ESG sector in the Korea Fund of Funds’ ad hoc investment project. At that time, Smilegate Investment secured the GP position after competing with Mason Capital, SGC Partners, Hi Investment Partners, Prologue Ventures, and Korea Value Investment.

The reason Smilegate Investment was chosen as GP lies in its ongoing impact investment efforts. Since last year, it has adhered to impact investment principles for all investment targets. The Investment Review Committee evaluates whether the businesses presented create positive environmental and social impacts.

In line with the ESG investment guidelines, the company also established a related organization. They created the ‘ESG Governance Team,’ a decision-making body for reviewing ESG investments. This team is led by Executive Director Moonkyu Park from the Management Support Headquarters, with Deputy General Manager Yumi Shin and Manager Baro Seon among others. They will be responsible for investment review and due diligence.

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