Chairman Kim Hakkyun of KVCA: "Establishing KOSDAQ Fund Linked to National Growth Fund... 30 Trillion Won Annually" (Comprehensive)

Press Conference with Kim Hakkyun, Chairman of the Korea Venture Capital Association

"Proposal for a 30 Trillion Won KOSDAQ Fund Operated Over Five Years"

The Korea Venture Capital Association has announced its plan to create a KRW 30 trillion annual KOSDAQ Activation Fund this year, in conjunction with the National Growth Fund. In addition to the government's KOSDAQ activation policy, the association emphasized the need to create a virtuous cycle of venture investment by improving the structure of the exit market, focusing on institutional investors.

On the 13th, at a press conference marking the first anniversary of Kim Hakkyun's inauguration as Chairman of the Korea Venture Capital Association, held at the Westin Seoul Parnas Hotel in Gangnam-gu, Seoul, Chairman Kim is speaking.
Photo by Hwang Seoyul chestnut@

At a press conference marking the first anniversary of Kim Hakkyun's inauguration as Chairman of the Korea Venture Capital Association, held on March 13 at the Westin Seoul Parnas Hotel in Gangnam-gu, Seoul, Chairman Kim revealed this plan. The National Growth Fund is a public-private fund worth KRW 150 trillion, supporting the entire advanced strategic business ecosystem.

Chairman Kim's vision is as follows. The National Growth Fund, together with policy institutions and pension funds, will create the parent KOSDAQ Activation Fund. Through investments from the parent fund, sub-funds will be established. Private financial institutions, general corporations, or individuals can invest in the sub-funds, either directly or through privately offered indirect public funds (a structure that allows individuals to pool money to invest in private equity funds). These sub-funds will then invest in existing KOSDAQ shares, small and venture companies, or new KOSDAQ shares.

Chairman Kim stated, "We are designing and proposing a fund of about KRW 30 trillion that can be operated for up to five years by institutions," adding, "In Korea, public offering funds are the final destination, but in the United States, NASDAQ companies find it easier to raise funds after going public." According to the association, the alternative investment share of GDP is 0.75% in Korea and 1.28% in the United States. Chairman Kim further explained, "In Korea, the amount raised after listing is only about 0.34% of GDP, which is even lower. While we have created policies that make Korea a good place to do business, now is the time to focus on building global companies, which is why the KOSDAQ Activation Fund is necessary."

The goal of the KOSDAQ Activation Fund linked to the National Growth Fund is to increase the proportion of long-term institutional investors in the KOSDAQ market, where individual investors currently dominate. The proportion of individual investors in the KOSDAQ market exceeds 70%, whereas in the United States, institutional investors account for 50-60%. By expanding institutional participation, the intention is to drive a long-term structural transformation.

Regarding the government's policy to remove underperforming companies from KOSDAQ, Chairman Kim stated, "The government said it would create a structure of 'many births and many deaths' (frequent creation and exit), and I understand they are starting with the 'deaths' and will also focus on the 'births.' Venture investment amounts are increasing every year, and since President Lee Jaemyung has set a goal of KRW 40 trillion in venture investments by 2030, the exit market must respond accordingly."

Previously, the Venture Capital Association, together with related organizations such as the Venture Business Association and the KOSDAQ Association, has made policy proposals to vitalize the KOSDAQ market. The reason the KOSDAQ market is so important to the VC industry is that IPOs are one of the main exit strategies for VC investments. Chairman Kim commented, "Through communication in various fields, concrete plans are being promoted to improve the KOSDAQ market, such as conversion to holding companies for separation and independence."

Chairman Kim also stated, "We will expand the creation of offshore funds that allow participation by global limited partners (LPs), and will improve related systems so that global investors can be attracted to domestic venture funds."

In addition, to rationalize the exit market system, excessive lock-up restrictions (prohibiting stock trading for a certain period) for VCs will be eased. Pre-listing practices will also be improved by allowing voluntary and gradual conversion of preferred shares to common shares, or conversion to common shares after the public offering price is determined following listing review approval, depending on market conditions. The revitalization of secondary funds and special technology listings are also set as goals for this year.

Chairman Kim declared, "We plan to continue making 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.