This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:37 p.m. on June 19, 2026.
Overseas sovereign wealth funds are reviewing a plan to invest in the domestic defense company MNC Solution. The approach would be to commit capital to the Korea Investment & Securities Co. Partners PE division's project fund, which is the preferred bidder for acquiring MNC Solution. The industry interprets this as growing interest from foreign capital in the growth potential of so-called "K-defense."
According to the investment banking (IB) industry on the 19th, Korea Investment & Securities Co. Partners PE, as the preferred bidder for acquiring MNC Solution, is in final talks with the seller over price terms. As early as the end of this month, it plans to sign a stock purchase agreement (SPA) and then begin in earnest to form a project fund.
Large overseas institutional investors, including sovereign wealth funds, are said to be reviewing a plan to commit to the project fund. The acquisition target is 73.78% management-control equity in MNC Solution held by the Socius–Well to Sea Investment consortium, and the amount is expected to be set at around 1 trillion won. About half, roughly 500 billion won, will be raised through a blind fund and a project fund.
Behind their interest in MNC Solution is the expansion of exports in K-defense. Since the Ukraine-Russia war, demand for conventional weapons has increased, especially in Europe, and demand for modernizing air defenses and ground weapons is also rising in regions such as the Middle East.
From the perspective of overseas sovereign wealth funds, a defense components maker is an attractive investment destination. MNC Solution is not a company that builds complete weapons systems, but as a supplier of key components such as hydraulics and drive systems, it is seen as a company that can directly benefit from the trickle-down effects of expanding K-defense exports. In particular, once defense components are adopted for a specific weapons system, there is a strong likelihood of continued replacement parts and maintenance over the equipment's operating life. As a result, analysts say this aligns with sovereign wealth funds that prefer long-term investments.
Some also note that strict restrictions apply when foreign capital invests in defense companies like MNC Solution. Under Article 6 of the Foreign Investment Promotion Act, a foreigner must obtain permission from the Ministry of Trade, Industry and Resources when acquiring new or existing shares for the purpose of participating in the management activities of a Korean defense company.
However, industry officials said there is no major issue if foreign capital does not exceed 50% of the total fund size. Article 18-3, Paragraph 1 of the Enforcement Decree of the Act on the Prevention of Divulgence and Protection of Industrial Technology defines "foreign investment" as when a foreigner seeks to own 50 out of 100 parts or more of a target institution's stock or equity.
An IB industry official said, "MNC Solution is a key components maker that directly benefits from the expansion of K-defense exports, so it is only natural that overseas sovereign wealth funds and pension funds would be highly interested."
Still, with the domestic stock market increasingly concentrated in mega-cap semiconductor stocks and defense stock MNC Solution showing weakness, it is important to smoothly finalize the SPA by bridging the price gap between the seller and the preferred bidder.
MNC Solution shares have fallen about 40% this year. In response, the company decided to carry out a bonus issue allocating two shares per one existing share to increase the free float and stabilize the share price.