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Korea Fund Of Funds To Be Increased By 21.5%, Make Room For More Investments

By February 14, 2017 at 6:51 am
Korean fund of funds to be increased (Photo : SeongJoon Cho — Bloomberg via Getty Images)

Expect the fund of funds to be increased significantly as the Small and Medium Business Administration of South Korea announced the raise. The fund of funds will be raised to 735 billion won this year which is a 21.5 percent growth from a year earlier.

The supposed breakdown of the fund of funds are as follows: 520 billion won will come from SMBA, 153 billion won from the Ministry of Culture, 30 billion won from Sports and Tourism, 20 billion won from the Korea Intellectual Property, and 12 billion won from the Ministry of Science among others.

The SMBA is planning to raise various types of venture funds worth at least 1.4 trillion won this year. This will include the reflecting stages of corporate growth, those for assisting in regional companies and those for female entrepreneurs. At least 80 percent of the fund of funds will be invested for startups, global funds and companies who are in their early stages of growth. This is done so that the investment centered startup ecosystems can be enriched and venture firms' global business can be facilitated.

220 billion won will be invested for the creation of startup funds worth 366 billion won. 206 billion won will be invested for startups and venture firms' overseas business and business globalization worth 550 billion won.  50 million will be dedicated to secondary funds and M&A funds and an investment recovery fund of 333 billion won will be raised based on investment from the private sector. Lastly, the funds for regional companies and female entrepreneurs will have a budget of 48 billion won.

Incentives are also being prepared for the fund of funds so that more investors in the private sector will be interested in venture investment. For example, a minimum rate of return is lowered from 5 percent to 3 percent in order for the venture capitals' expected return can be raised.

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