Shinhan Asset Management said on the 22nd that it launched the industry's first "Shinhan Innovative Corporations Growth Investment Trust No. 1" since the business development company (BDC) system took effect.
Shinhan Innovative BDC No. 1 is structured with a strategy that allocates 60% or more of the asset to secondary investments focused on innovative corporations and the securitization of liquidity provider (LP) equity.
A BDC is a closed-end public fund designed to allow retail investors to participate in growth-corporations investing, aiming to expand the supply of venture capital to innovative corporations and unlisted corporations. After the fund is set up, it has the institutional feature of providing liquidity by listing on KOSDAQ within a certain period.
Shinhan Asset Management said the product was designed with a structure that selectively invests in corporations whose performance has been verified to a certain degree after the initial investment, considering both growth potential and risk management.
It also actively leveraged secondary equity transactions to ease potential liquidity constraints in unlisted investments and increase the likelihood of exits.
The fund will be managed by the Innovative Investment Finance Division at Shinhan Asset Management, which is responsible for a pillar of productive finance. This organization has contributed to building a private sector–led venture investment ecosystem and has experience managing major parent funds such as the Shinhan Startup Venture Fund series, the Innovative Industry Fund, and the Public Growth Fund. It has also accumulated management capabilities expanded into direct investment through the Shinhan Venture Secondary Fund.
Meanwhile, Shinhan Asset Management plans to first set up and manage the fund focusing on institutions and professional investors, and then proceed with sequential listings in line with the establishment of the institutional foundation, including portfolio composition and tax benefits for retail investors. It also plans to build an "integrated investment platform" based on the investment network of all group affiliates and to source investment opportunities.
Cho Seong-ho, head of the Innovative Investment Finance Division at Shinhan Asset Management, said, "A BDC is financial infrastructure that can simultaneously expand capital supply to growth corporations and investors' profit opportunities," adding, "Based on strict internal controls and independent management principles, we will set a new standard for Korea's venture capital market."