Lee Un-ju of the Democratic Party of Korea said on the 23rd at the National Assembly's Trade. Industry Energy. SMEs. and Startups Committee audit of the Korea Venture Investment Corporation that the Korea Fund of Funds' management fee rate should be lowered and adjusted to a structure centered on performance fees.
The Korea Venture Investment Corporation, as the management entity of the Korea Fund of Funds, receives an annual management fee and performance fee. The management fee is set according to the size of the investment, and based on last year, for 986.17 billion won in investment, the Korea Venture Investment Corporation received 43.8 billion won in management fees.
Lee said the management fee rose 58% from 27.7 billion won in 2020 to 43.8 billion won in 2024, and net income increased by 35.8 billion won over the same period from 4.5 billion won to 16.1 billion won, adding that while it is acceptable for fees to rise as investment grows and workload increases, the management fees currently being paid are excessive. She then emphasized that in the long term, the management fee rate should be lowered and the Fund of Funds' fee structure should be adjusted to center on performance fee rates paid according to performance.
Lee also pointed to the Korea Venture Investment Corporation's dividend policy. Because the dividend rate does not exceed 30%, retained earnings jumped 491% from 9.4 billion won in 2020 to 46.2 billion won in 2024.
Lee said the Korea Venture Investment Corporation does not require facility investment and is operated mainly by workforce utilization, so it is necessary to expand the dividend payout ratio rather than increasing retained earnings, adding that instead of piling up retained earnings, dividends should be increased.