Shinhan Bank liquidated the film investment fund it established with venture capital firm Daesung Private Equity. Shinhan Bank had invested in Korean blockbusters such as "The Battleship Island," "The King's Affection," "Namhan Fortress," and "Hansan: Rising Dragon" through this fund. However, due to a recent contraction in the film industry, it was unable to generate revenue, leading to the liquidation.
According to the financial sector on the 27th, the "Shinhan Bank-Daesung Cultural Contents Investment Fund" recently completed its liquidation and deregistration procedures. This fund ceased making film investments after the release of "Alien + Man Part 1" by director Choi Dong-hoon and "Hansan: Rising Dragon" by director Kim Han-min in 2022. The film investment fund reportedly could not pay performance fees as its book value (400 million won) fell short of its acquisition cost (500 million won) and was liquidated.
This fund was established in 2016 at a scale of 7 billion won, a time when bank investments in films were gaining attention. It was created in collaboration between Shinhan Bank and Daesung Private Equity, which was known as a prominent content investment firm. Shinhan Bank held a 71% equity stake.
This fund primarily invested in Korean blockbusters such as "The Battleship Island," "The King's Affection," "Namhan Fortress," and "The Anyang City Project." However, investment contracted due to the poor box office performance of "Alien + Man Part 1" in 2022. Recently, Daesung Private Equity significantly reduced its film-related investments, which also impacted the fund's liquidation.
The trend of film investments by banks, which once spread like a fad, has mostly disappeared. This is because the number of theatergoers has significantly decreased due to the recent expansion of over-the-top (OTT) services, leading to a contraction in the film industry.
Last year, domestic theater revenue was 1.1945 trillion won, which is 65% of the average from 2017 to 2019 before the COVID-19 pandemic (1.8282 trillion won). The annual audience number was about 123.13 million, a drop of 100 million compared to before the pandemic. Multiplexes such as Lotte Cinema and Megabox have not been able to avoid losses, and CJ CGV's operating profit has also decreased significantly. Last year, only about 10 domestic films exceeded the break-even point.