First Fund Sold Out in 5 Days; Second 'National Growth Fund' to Launch in Q3

The Financial Services Commission (FSC) announced that it will launch the second public-participatory National Growth Fund in the third quarter of this year, with a scale of 600 billion won.
FSC Chairman Lee Eok-won stated at the "Meeting with National Growth Fund Managers," held at the Korea Financial Investment Association in Yeouido, Seoul, on the 12th, "We will launch the second fund to meet public demand and contribute to a major economic leap through productive finance."
The first fund, which was offered previously, sold out completely in just five days and will begin investment operations starting tomorrow, June 15.
The government will provide 120 billion won in subordinated capital, the same amount as the first fund.
The plan is to utilize 40 billion won from the 150 billion won budget for direct investment and 800 billion won from the 400 billion won budget for infrastructure investment and loans.
While the managers for the master fund and public fund will remain the same as the first round, new managers will be selected for the sub-funds, which are responsible for actual investment operations.
Details regarding sales, such as allocations for retail investors and the proportion of online sales, will be improved based on the performance of the first fund and feedback from banks and securities firms.
The meeting also discussed incentive measures to strengthen the accountability of fund managers and boost returns.
Previously, President Lee Jae-myung also ordered the preparation of measures to improve the returns of participating managers during a cabinet meeting last month.
Currently, sub-fund managers are required to invest at least 1% of the total fund amount as subordinated capital.
If the cumulative return of the fund exceeds 30% over five years, the manager can receive 12% of the excess profit as a performance fee.
If the fund achieves at least 40% investment in new capital for unlisted companies, KOSDAQ-listed companies with special technology status, and investments in non-capital regions respectively, the performance fee can be increased to 16–20%.
To improve returns, the authorities have allowed a 40% autonomous investment limit for sub-funds and permitted the use of KOSDAQ venture funds.
Investment performance will be monitored through monthly and quarterly reports.
The Financial Services Commission plans to have the Korea Growth Investment Corp. select excellent managers every year and provide additional incentives, such as preferential treatment when participating in follow-up funds and policy funds.
Furthermore, the commission decided to promote competition by requiring the disclosure of returns for each sub-fund in asset management reports, in addition to existing details such as public fund returns, the top 10 holdings, and investment weightings.
The commission also explained that it would evaluate the incentive systems for key management personnel when selecting sub-funds to prevent talent turnover.
Chairman Lee emphasized, "Managers must manage the public's assets well and return good results," adding, "Please do your best to generate the best possible returns by utilizing your know-how and keen insight."
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.