Financial authorities will create an "ultra-long-term technology investment fund" to supply stable financing for up to 16 years to advanced industries such as next-generation semiconductors and bio. The fund will total 880 billion won, with 77% contributed as policy capital to enhance capital safety.
The Financial Services Commission and Korea Development Bank (KDB) on the 20th issued a call for applications to select managers for the ultra-long-term technology investment fund, kicking off the project in earnest.
The ultra-long-term technology investment fund is an indirect investment program of the Public Growth Fund, newly created to supply long-term patient capital for up to 16 years to advanced-technology corporations that require a long time to commercialize.
This year's fund size is 880 billion won. To supply long-term capital, 680 billion won, or 77% of total resources, will be raised as public funds. The Advanced Strategic Industry Fund (600 billion won) and the fiscal budget (80 billion won) will be injected.
The fund's primary investment targets are: ▲ corporations rated TI5 or higher in Technology Credit Bureau (TCB) investment-grade technology evaluations ▲ corporations that received technology evaluations under the Technology Transfer Act ▲ corporations that received evaluations such as inventions under the Invention Promotion Act (IP valuation).
To prevent investment concentration, a mandatory allocation was set so that more than 40% of primary investments go to fields other than artificial intelligence (AI) and semiconductors. In particular, follow-on investments in startups that received support from the parent fund, domestic investments for acquiring overseas technology corporations, and follow-on investments in corporations backed by this fund will receive weighted credit to favor investment track records.
The fund will select three managers in the small-cap league and four in the mid-cap league. Private equity (PE) firms, venture capital (VC) firms, new technology investment firms, and accelerator (AC) firms are eligible.
Manager proposals will be accepted until the 3rd of next month, with managers to be selected by October and fund deployment to begin as early as year-end. Selected managers will run 80 billion won in the small-cap league and 160 billion won in the mid-cap league.
To enhance expertise, evaluations will consider whether the manager has investment personnel specialized in the primary investment fields and whether it has secured and can leverage a network of technology experts.