▲ Financial Services Commission Chairman Lee Eok-won speaks at a meeting with managers of the public-participation National Growth Fund held at the Korea Financial Investment Association in Yeouido, Seoul, on the 12th.
The Financial Services Commission (FSC) announced that it will launch the second round of the public-participation National Growth Fund in the third quarter of this year, with a scale of 600 billion won.
FSC Chairman Lee Eok-won stated at a meeting with 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 round of the fund sold out completely in just five days and is set to begin investment operations starting tomorrow, June 15.
The government will provide 120 billion won in subordinated capital, the same amount as in the first round.
The plan is to utilize 40 billion won from the 150 billion won budget for direct investment and 80 billion won from the 400 billion won budget for infrastructure investment and loans.
While the managers for the master fund and public offering fund will remain the same as in the first round, new managers will be selected for the sub-funds that handle actual investment operations.
Sales-related details, 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 plans to strengthen the accountability of fund managers and boost returns.
Previously, President Lee Jae-myung also ordered the preparation of measures to improve returns for 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 a target of 40% or more in new capital investments for unlisted companies and KOSDAQ-listed companies with special technology status, as well as investments in non-capital regions, the performance fee can be increased to 16–20%.
To improve returns, authorities have allowed sub-funds an autonomous investment limit of up to 40% and enabled the use of KOSDAQ venture funds.
Investment performance will be monitored through monthly and quarterly reports.
The Financial Services Commission plans to have Korea Growth Investment Corp. select excellent managers annually and provide additional incentives, such as preferential treatment when participating in follow-up funds and policy-oriented funds.
Furthermore, to promote competition, the commission will require the disclosure of returns for each sub-fund in asset management reports, in addition to existing details such as public fund returns, top 10 holdings, and investment weightings.
The commission also explained that it will evaluate the incentive systems for key management personnel when selecting sub-funds to prevent talent turnover.
Chairman Lee emphasized, "Managers must manage public assets well and return good results," adding, "Please do your best to generate the highest 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.