Chairman Kim Hakkyun of KVCA: "Establishing a KOSDAQ Fund Linked to the National Growth Fund... Boosting Institutional Investor Participation"

Press Conference Marks One Year Since Hakkyun Kim Became KVCA Chairman

Establishing a Parent Fund with Investments from the National Growth Fund

Sub-funds to Receive Private Capital and Invest in New and Existing KOSDAQ Shares

The Korea Venture Capital Association (KVCA) has announced plans to establish a KOSDAQ Activation Fund this year, in conjunction with the National Growth Fund. The core goal of this initiative is to shift the KOSDAQ market, which is currently led by individual investors, toward a structure centered on institutional investors.

Hakkyun Kim, Chairman of the Korea Venture Capital Association.

During a press conference marking the first anniversary of Chairman Hakkyun Kim’s inauguration, held at the Westin Chosun Seoul Parnas Hotel in Gangnam-gu, Seoul on March 13, Kim outlined this plan. The National Growth Fund is a public-private partnership fund worth 150 trillion won, which supports the entire advanced strategic industry ecosystem.

Chairman Kim’s proposal is as follows: The National Growth Fund, together with policy institutions and pension funds, will invest to create a parent “KOSDAQ Activation Fund.” Sub-funds will then be established through investments from the parent fund. Private financial institutions, general corporations, or the public can inject capital into these sub-funds, either through direct investment or as private indirect public offering funds (funds that pool money from individuals to invest in private equity). The sub-funds will then invest in existing KOSDAQ shares, new shares of SMEs and venture companies, as well as new KOSDAQ shares.

Chairman Kim stated, “In order to transform the KOSDAQ market—currently dominated by individual investors—toward a structure that encourages greater participation from long-term institutional investors, we expect to create significant synergy by supplying large-scale liquidity to the market through the establishment of a KOSDAQ fund linked to the National Growth Fund.” While the share of individual investors in the KOSDAQ market exceeds 70%, institutional investors account for 50% to 60% in the United States. By increasing institutional participation, the aim is to achieve a long-term structural transformation of the market.

The KVCA, along with related organizations such as the Korea Venture Business Association and the KOSDAQ Association, has been making policy proposals to revitalize the KOSDAQ market. The KOSDAQ market is crucial for the venture capital industry because an initial public offering (IPO) is one of the main exit strategies for venture investments. Chairman Kim said, “Through multifaceted communication, specific improvement measures for the KOSDAQ market—such as separation and independence through conversion into holding companies—are being pursued.”

In addition, Chairman Kim said, “We will expand the establishment of offshore funds that allow global limited partners (LPs) to participate, and improve relevant regulations so that global investors can enter domestic venture funds.”

To promote a more rational exit market system, the association will also seek to ease excessive lock-up periods (mandatory restrictions on share trading for a certain period) for venture capitalists. Further, pre-IPO practices will be improved so that preferred shares can be voluntarily and gradually converted into common shares according to market conditions, or converted into common shares after the IPO price is finalized following listing approval. The activation of secondary funds and special technology listings has also been set as a goal for this year.

Chairman Kim stated, “We will continue to make various efforts for the industry, including policy proposals, so that the venture investment ecosystem can develop into a healthier and more sustainable structure.”

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