The Financial Services Commission said on the 15th that, as the first step to raise funds through an indirect investment method for the Public Growth Fund, it will begin selecting an operator for the government fund-of-funds through the Korea Development Bank (KDB). A government fund-of-funds is a fund in which public money, aimed at reducing the risk burden on private capital, is injected first.
The government plans to establish the Public Growth Fund at a scale of 150 trillion won over the next five years and supply more than 30 trillion won to the advanced industrial ecosystem this year. The Financial Services Commission plans to begin injecting funds in earnest after deliberations by the investment review committee for individual investments and the fund management committee.
This year, the Financial Services Commission plans to raise more than 5.5 trillion won in private capital, using 450 billion won in fiscal funds and 1.5 trillion won from the advanced strategic industry fund as seed money. Of the fiscal funds, 330 billion won will go to the "general policy fund," which raises and manages institutional investor capital. The remaining 120 billion won will go to the "public participation fund," which individual members of the public invest in.
Funds in which public money is injected first (government fund-of-funds) include: ▲ support across industries (160 billion won) ▲ scale-up, individual industries, and local support (90 billion won) ▲ ultra-long-term technology investment (80 billion won) ▲ public participation (120 billion won), among others.
In addition to managing the government contribution, the government fund-of-funds operator will work with KDB to select sub-fund managers. Sub-fund managers selected for the general policy fund will be responsible for raising private investor capital and finding investment destinations to manage the pooled funds. Full-scale investments are expected to begin at the end of the year, once the raising of private investor funds is completed.
Around June to July this year, the government plans to launch and sell a public participation fund that ordinary citizens can subscribe to directly. The fund's target size is 600 billion won, or 720 billion won including subordinated public funds. For the public participation fund, after selecting the government fund-of-funds operator in March, the public fund manager and sub-fund managers will be chosen in the second quarter.