This article was published on the ChosunBiz MoneyMove (MM) site at 5:18 p.m. on Nov. 28, 2025.
Venture capital firms that received funds from the Korea IT Fund (KIF) have begun adjusting fund maturity provisions one after another ahead of forming new funds at year-end. This is because the KIF operator, the Korea Telecommunications Operators Association (KTOA), is sticking to an old standard that, citing an eight-year maturity for subfunds, says the bylaws do not allow a 10-year long-term maturity.
On the 28th, VC industry sources said that major limited partners (LPs) in venture investment funds, including financial institutions and pension and mutual aid associations, have recently been requesting changes to the bylaws adjusting the lifespan of the blind venture investment funds that VCs plan to form. It was understood that the main point is lowering the fund life, which had been set at 10 years, to eight years.
A private LP official in charge of venture fund commitments said, "We agreed to long-term operation reflecting VCs' position that deep-tech investments such as artificial intelligence (AI), semiconductors and robotics require a considerably long period to secure technological maturity and commercialization, but recently there have been repeated demands to suddenly reduce that period again."
It is understood that KTOA is behind the VCs' requests to change the bylaws. KTOA resumed VC investments this year after two years with a scale of 150 billion won and on Oct. 16 selected 16 VCs as entrusted managers. Afterwards, KTOA ordered the VCs to set fund lives at eight years and to complete formation of new funds within six months from the selection date.
Despite the overall lengthening of the period from startup investment to exit, there are criticisms that KTOA is virtually maintaining the old framework. This is because a trend among fund-contributing LPs to allow long-term operation has already formed, considering that domestic companies typically take 13 years from founding to listing.
In fact, the Korea Development Bank allowed fund maturities of up to 12 years when it recruited entrusted managers for its innovative industry fund this year. It set an apparent life of 10 years with a five-year investment period and a five-year exit period, and finalized a structure that allows extensions of up to two one-year increments. The intention was for VCs to act as longer-term running mates.
The Korea Fund of Funds is actively encouraging long-term investment. Korea Venture Investment Corporation, which operates the fund of funds, awarded bonus points in this year's regular commitment project evaluation for proposals to operate venture fund maturities of 10 years. It signaled a preference for long-term investment, and Korea Venture Investment Corporation had already set the news space fund's maturity at 10 years last year.
There are even criticisms that KTOA is completely out of touch with reality. Even though all KIF investment areas are deep tech such as AI and ICT (information and communications technology) commercialization, the maturity is fixed at eight years. Critics say that under KIF's maturity structure, long-term investment aimed at discovering and supporting the growth of promising corporations is impossible.
Analysts say organizational characteristics of KTOA, which operates KIF, have led to a conservative management stance. It is understood that in 2003 the three telecom companies (SK Telecom, KT and LG Uplus) contributed a total of 300 billion won to create the fund to help develop the information technology (IT) industry, but that operation is handled by KTOA, which is structured as an association.
A VC industry official said, "Although KIF was formed with private capital, it is managed more conservatively than policy funds," and added, "Because each investing telecom company must hold a board meeting and proceed to an investment committee to change standards, the association inevitably remains reluctant to change the structure in line with market changes."
KTOA is also said to require that VCs, the managers rather than the fund, bear the expense of fair value valuation of investment assets, and to demand special investor status regardless of contribution proportion. Although this is intended to participate in key fund management decisions, critics say it encourages formation delays.
Meanwhile, by the end of last year KIF had invested a total of 4.7 trillion won in 1,669 ICT start - up companies through 91 subfunds. With the three telecom companies' recent agreement, KIF's lifespan has been extended to 2040, and KTOA said its eight-year maturity standard for subfunds was an item already shared at an entrusted manager meeting earlier this year.