The First Private Venture Fund Launched... "Expectations for Revitalizing Venture Investment"

Hana Financial Group Raises 100 Billion KRW
Focuses on Ultra-Gap Areas with 10-Year Investment

Minister Lee Young of the Ministry of SMEs and Startups is delivering a congratulatory speech at the launch event of the first private venture fund held on the 20th at the Scale-up Center of Seoul Startup Hub in Gangnam-gu, Seoul.
[Photo by Choi Dong-hyun]

Since the institutionalization of the private venture mother fund system, Hana Financial Group is the first to establish a fund worth 100 billion KRW. Hana Financial Group will fully invest, and Hana Ventures will focus on investing in 10 leading-edge fields over the next 10 years.

On the 20th, the Ministry of SMEs and Startups and Hana Financial Group held a fund launch ceremony at the Seoul Startup Hub Scale-up Center in Gangnam-gu. The Ministry and Hana Financial Group held a "Priming Water Ceremony," symbolizing the preparation of a catalyst for the transition to a private-led venture ecosystem. The amendment to the Enforcement Decree of the Venture Investment Promotion Act, which includes the details of the private venture mother fund, was approved at the Cabinet meeting on the 10th and has been in effect since the 19th. Unlike advanced global venture countries such as the United States, Korea had a national mother fund but no cases of private-led fund formation.

According to the amended Venture Investment Act, startup investment companies or new technology finance businesses with experience in managing large-scale funds and the ability to recruit investors can operate funds independently. This means Hana Ventures can manage the entire investment amount on its own. To expand venture and startup investments, it is mandatory to invest at least 60% of the total capital in venture investment associations. To prevent the proliferation of small-scale funds, a minimum formation size of 100 billion KRW has been secured. The current limit on holding listed stocks, which is 20% of the venture investment association's capital, has also been raised to 40%. Tax benefits are also available. Corporate investors who invest in venture companies through private mother funds receive a tax credit of 5% on the actual investment amount and 3% on the increase. Individual investors can receive an income deduction of 10% on their investment amount.

The Ministry of SMEs and Startups expects that by distributing investment funds across multiple sub-funds, risks will be reduced and stable returns will be obtained. Additionally, by broadly sharing the portfolios of sub-funds, they anticipate effectively exploring investment targets and forming partnerships with venture capitalists (VCs) possessing expertise in various fields, thereby enhancing investment professionalism. At the launch ceremony, Korea Venture Investment Corp. and Hana Ventures signed a business agreement. Korea Venture Investment Corp. will transfer its know-how from managing the representative domestic policy mother fund for 18 years to Hana Ventures. Minister Lee Young of the Ministry of SMEs and Startups stated at the ceremony, "The implementation of the private venture mother fund system will be an opportunity to strengthen the role of the private sector in the venture investment market," adding, "We hope that private venture mother funds will be actively established and become a key player in expanding private capital inflow alongside government mother funds."

After the launch ceremony, a forum was held where the venture capital industry and academia discussed the development direction of private venture mother funds. Opinions were raised on the need to allow venture investment association contributions from retirement pension reserves and to strengthen tax benefits, as well as the necessity of introducing public offering-type private venture mother funds to scale up venture mother funds.

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