The Financial Services Commission said it held a task force (TF) meeting on the Public Growth Fund with public participation (Public Participation Growth Fund) on the 28th, chaired by Son Young-chae, head of the Public Growth Fund Promotion Team. The Financial Services Commission (FSC) gathered opinions from private-sector experts at the meeting on the product structure and fund management plan for the Public Participation Growth Fund.
The Public Participation Growth Fund is a policy-type fund that allows the public to indirectly invest, through a public offering fund, in advanced strategic industries that will lead the future Korean economy. The public offering fund for retail investors will be designed to diversify investments across multiple sub-funds managed by private asset managers.
By having the public share fund revenue directly, the aim is to spread the fruits of advanced industry growth across society while promoting a culture of long-term investment to broaden the base of the capital market. The target fund size is 600 billion won each year, totaling 3 trillion won over the next five years.
Investors will receive significant tax benefits. According to a proposed amendment to the Act on Restriction on Special Cases Concerning Taxation recently submitted to the National Assembly, income deductions of 10%–40% are available by investment bracket, and a low separate taxation rate of 9% applies to dividends income. This is seen as offering a greater preference than existing policy-type funds.
Experts attending the meeting said in unison, "It is important to design a product that can secure management performance while achieving the policy goal of long-term investment in advanced industries." The TF plans to conduct detailed discussions on the following: ▲ basic fund structure including investment targets and ratios ▲ incentive structure for asset managers and performance evaluation criteria ▲ criteria for selecting sub-fund managers.
The Financial Services Commission (FSC) plans to move swiftly with TF discussions, finalize and announce the product structure in March, select managers for the public offering fund and sub-funds, and roll out a product around June that the general public can subscribe to directly. An FSC official said, "We will build a financial ecosystem in which the public are both the drivers and beneficiaries of future innovation industry growth."