Shinhan Asset Management Launches Korea's First BDC Fund 'Shinhan Innovative Company Growth Investment Trust No.1'

Shinhan Asset Management announced on April 22 that it has launched the 'Shinhan Innovative Company Growth Investment Trust No.1' (hereinafter referred to as Shinhan Innovative BDC No.1), becoming the first in the industry to introduce such a fund following the implementation of the Business Development Company (BDC) system.

A BDC is a closed-end public fund designed to allow general investors to participate in investments in growth companies. It is characterized by its institutional framework, which expands the supply of venture capital to innovative and unlisted companies and provides liquidity through listing.

Shinhan Innovative BDC No.1 is structured with a strategy of allocating more than 60% of its assets to investments in innovative companies and to secondary investments centered on the securitization of LP (Limited Partner) interests. The fund aims to achieve both growth and risk management by selectively investing in companies that have undergone a certain level of verification after initial investment. A Shinhan Asset Management representative explained, "By actively utilizing secondary equity transactions, we have alleviated potential liquidity constraints associated with unlisted investments and improved the prospects for investment recovery."

This fund will be managed by the Innovative Investment Finance Division, which is responsible for 'productive finance' within Shinhan Asset Management. The division has previously managed major parent funds such as the 'Shinhan Startup Venture Fund Series,' 'Innovation Industry Fund,' and 'National Growth Fund,' contributing to the development of a venture investment ecosystem led by the private sector. In particular, through the 'Shinhan Venture Secondary Fund,' the division has accumulated management expertise that extends into direct investment, and this know-how is expected to be utilized in the new fund as well.

Shinhan Asset Management plans to initially establish and manage the fund for institutional and professional investors to build a stable portfolio. Subsequently, as related systems such as tax incentives for general investors are put in place, the company will sequentially pursue listing on KOSDAQ, thereby opening up opportunities for general investors as well. In addition, based on the investment network of all affiliates within the group, Shinhan plans to build an integrated investment platform and continuously discover promising investment opportunities.

Jo Seongho, Head of Innovative Investment Finance Division at Shinhan Asset Management, stated, "A BDC is a financial infrastructure that can simultaneously expand capital supply to growth companies and return opportunities for investors. Based on strict internal controls and independent management principles, we will set a new standard in the domestic venture capital market."

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