Bithumb and LIG were newly designated as large corporate groups this year with a holding company structure, and Global SeAH established a holding company. As the holding company system spreads to more than half of the large corporate groups, corporate venture capital (CVC) has executed a total investment of 245.1 billion won, primarily in the fields of artificial intelligence (AI) and biotechnology.
On the 26th, the Fair Trade Commission analyzed and publicly disclosed the status of corporate venture capitals associated with holding companies and general holding companies under the Fair Trade Act.
According to the Fair Trade Commission, as of the end of December last year, the number of holding companies totaled 177, an increase of three from the previous year (174). After a temporary decline following the asset requirement increase from 100 billion won to 500 billion won in 2017, the number of holding companies has shown a gradual upward trend since 2021.
This year, among the 92 disclosure target corporate groups (large corporate groups), more than half, 50 groups (54.3%), own holding companies. Major corporate groups including SK, LG, POSCO, Lotte, Hanwha, HD Hyundai, GS, NongHyup, Shinsegae, and CJ are included. Among them, 46 groups fall under 'conversion groups,' where more than half of their total affiliated companies' assets belong to the holding company system.
The total number of subsidiaries, sub-subsidiaries, and great-grandchildren companies affiliated with holding companies reaches 2,462, with an average of 14 companies controlled per holding company. The average liability ratio is 43.7%, significantly below the legal limit of 200% under the Fair Trade Act. The average equity ratio for subsidiaries and sub-subsidiaries is 73.2% and 85.2%, respectively, meeting the legal minimum equity ratios (30% for listed companies and 50% for unlisted companies).
The CVC system, which enables venture investments within holding companies, is also expanding. The Fair Trade Act generally prohibits the ownership of financial companies by general holding companies, but since 2022, it has allowed the establishment of CVCs through 100% funding if certain conditions are met.
As of the end of last year, there were 10 general holding conversion groups that owned CVCs, with a total of 14 CVCs operated by them. Among those 14, 11 were newly established and registered after the introduction of the system.
Among them, 12 CVCs operate a total of 71 investment partnerships, of which 27 partnerships were established after being incorporated into the holding company system. A total of 10 new partnerships were established last year, with a total pledged amount of approximately 333 billion won. Of this, 79.1% was generated from internal funds of the holding companies.
Of the 14 CVCs, 13 invested a total of 245.1 billion won in 121 corporations last year. This represents an increase of 38.9% from the previous year (176.4 billion won). The average investment amount per case also increased by 25.8%, from 1.32 billion won to 1.66 billion won. Overseas investments accounted for 8.9% of total new investments, with three CVCs investing 11.4 billion won.
In particular, the investment proportion in startups with less than three years of operation increased from 9.8% (17.2 billion won) the previous year to 11.1% (27.1 billion won) last year, indicating that CVCs are expanding their role in venture capital.
By industry, the largest investment share was in artificial intelligence (AI) and ICT services related to payments at 19.5%, followed by biotechnology and healthcare at 17.0% and other sectors at 15.5%.
An official from the Fair Trade Commission noted, "We will continue strict law enforcement to prevent the holding company and CVC systems from being abused as tools for the economic exploitation of the family's interests or as a way to bypass control. We will strengthen market monitoring functions by analyzing the ownership and funding structures of holding companies and the status of internal transactions from multiple perspectives."