This article was displayed on the ChosunBiz MoneyMove (MM) website at 4:08 p.m. on Sept. 3, 2026.
Korea Venture Investment Corporation is launching work to boost the profitability of the Mother Fund's culture and film account. Because the content industry requires policy support by nature, but weak investment results have persisted, there are limits to attracting private capital. The intent is to go beyond simply expanding the supply of policy funds and find an operating structure that can draw in private limited partners (LPs) and lift investment performance.
According to the venture capital (VC) industry on the 3rd, Korea Venture Investment Corporation recently began designing new performance indicators for the Mother Fund's culture and film account and preparing measures to improve profitability. The aim is to establish criteria to measure both the policy outcomes and the investment results of the culture and film account, and based on that, review operating methods that can expand the inflow of private capital.
The low profitability of the culture and film account has continued for years. The National Assembly Budget Office analyzed sub-funds liquidated since 2021 and found that the culture account's CG and 3D segment internal rate of return (IRR) was -6.69%, global content was -16.23%, and cultural industry was -8.71%. Negative IRRs also appeared in TV dramas (-6.83%), convergence content planning and development (-9.64%), and early-stage production (-4.22%). In the film account, Korean film planning and development and mid-to-low budget segments also recorded -4.05%.
The uncertainty of content investment has been evident even in recent blockbuster films. A prime example is director Na Hong-jin's film "Hope." "Hope," a big-budget title with hundreds of billions of won invested, drew expectations after being invited to compete at the 79th Cannes Film Festival and being pre-sold to more than 200 countries and regions before release. Private equity fund (PEF) manager ATU Partners invested 15 billion won in January this year through a project fund, and KOSDAQ-listed Episode Company also joined as a follow-on investor.
However, the cumulative audience for "Hope" now stands at 4.53 million, and it is expected to fall short of the industry's estimated break-even point (BEP) of 6 million to 7 million. This underscores the nature of content investing, where final investment returns are hard to "guarantee" based solely on buzz, artistic merit, or overseas pre-sales of distribution rights.
The National Assembly Budget Office also noted that if the low returns of K-content funds persist, it could weigh on attracting private capital and on the sustainability of the business. This means that even if policy funds are supplied to foster the industry, there are limits to steadily expanding fund size unless private capital comes in alongside.
The government is also adjusting the commitment structure in light of these issues. In this year's operating plan, the Ministry of Culture, Sports and Tourism presented a target return of around 2% for main investments in Korean films, mid-to-low budget Korean films, and animation. It raised the first-loss absorption ratio for private LPs from 15% to 20%, increased the share of returns above the hurdle transferred to private LPs from 30% to 40%, and expanded the call option ratio on the Mother Fund's committed stake from 30% to 40%. The approach is for the government to shoulder part of the loss risk first and allocate more excess returns to the private sector to strengthen investment incentives.
Korea Venture Investment Corporation's latest effort is likewise seen as a step to secure both policy objectives and investment profitability. The key is to design a structure that lowers loss risk and raises the likelihood of exit so private LPs can participate on an ongoing basis.
An industry official said, "The content sector inevitably involves high-risk, long-term investing, and excluding games, returns are so weak that even a 1x multiple is considered decent," adding, "In particular, the film sector's market is subdued, making it hard to build exit structures where private capital can come in and generate returns."