Government to Select Management Company for '150 Billion KRW' K-Bio Vaccine Fund

The Ministry of Health and Welfare will select a fund manager through Korea Venture Investment Corp. from the 31st of this month to the 15th of next month to establish a K-Bio Vaccine Fund worth 150 billion KRW.

The fund being established this time is a part of the 250 billion KRW fund formation portion of Mirae Asset Venture Investment and Mirae Asset Capital, which relinquished their fund manager qualifications last June.

The government and policy banks (Industrial Bank of Korea and Korea Development Bank) will each invest 35 billion KRW and 25 billion KRW, respectively. To promote this fund, the Ministry of Health and Welfare held the ‘K-Bio Vaccine Fund Formation Strategy Advisory Meeting’ on July 25th, where experts shared opinions on the recent investment market situation and fund structure reorganization. Based on this, a fund structure reorganization plan was prepared through consultations with related organizations and reflected in this fund manager selection announcement.

The target fund size was set at 150 billion KRW. However, if at least 70% (105 billion KRW) of the target amount is raised, the fund manager is allowed to start investing early through a priority formation method.

Also, the government’s investment of 35 billion KRW will be fully reserved first regardless of the fund size. This is intended to enable the fund size to be raised quickly and to allow the fund manager to have exclusivity.

However, to prevent moral hazard of the fund manager due to the full priority investment of the government’s contribution, management fee reductions and sanctions will be imposed on fund managers who fail to raise the target fund size.

The investment targets of this fund have been significantly expanded. The previous fund could only invest in pharmaceutical and bio companies that had received clinical trial plan approval (60% of the total commitment) and vaccine companies (15% of the total commitment). In the case of this K-Bio Vaccine Fund, the investment scope has been broadened to cover the entire bio-health sector, including medical devices, digital therapeutics, and ICT healthcare.

The selected fund manager must operate the fund for eight years from the fund establishment date. If the fund achieves returns exceeding the benchmark rate of 7%, the manager will receive a performance fee of up to 20%. Park Min-su, the 2nd Vice Minister of Health and Welfare, emphasized, “Considering the recent decline in venture investment in the pharmaceutical and bio sectors, the K-Bio Vaccine Fund being established this time has reorganized the fund structure so that the fund can be formed early and invested promptly. We expect the K-Bio Vaccine Fund to revitalize the shrinking bio-health investment market and become a driving force for innovative new drug development in Korea.”

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