Korea Investment Management Launches 'Korea Investment Level-Up Korea Fund'

Korea Investment Management announced on July 8 that it has launched the ‘Korea Investment Level-Up Korea Fund (Private Equity Fund of Funds Type),’ which focuses on investing in key industries and capital market policy beneficiaries expected to drive the mid- to long-term revaluation of the Korean stock market.

This fund was established based on the assessment that the domestic stock market has entered a new phase of advancement (level-up), driven by strong semiconductor performance momentum and government policies to enhance corporate value. The investment themes are largely divided into two pillars: ‘Korea’s core industries’ and ‘capital market policy beneficiaries.’ The core industries include ▲ the artificial intelligence (AI) value chain ▲ AI semiconductors ▲ physical AI (robots and mobility) ▲ security (defense and shipbuilding). Capital market policy beneficiaries expected to drive qualitative growth include Samsung Group stocks, K-Enterprise Value stocks—companies with potential to resolve low price-to-book ratios (PBR) through amendments to the Commercial Act—and high-quality KOSDAQ stocks.

The Korea Investment Level-Up Korea Fund is a fund of funds that allocates investments equally (approximately 14% each) across seven underlying private equity funds. Notably, each private equity fund adopts a ‘differentiated profit and loss’ structure, consisting of senior (Class 1) tranches invested by general clients and subordinated (Class 2) tranches invested by affiliates under Korea Investment Holdings, thereby enhancing stability.

If losses occur in the underlying private equity funds, subordinated investors will first cover losses up to 15% of each fund’s net assets. Conversely, if profits are generated, returns up to 10% of the private equity fund’s yield are distributed proportionally to both senior and subordinated investors according to their investment ratios. For returns exceeding 10%, 55% goes to senior investors and 45% to subordinated investors.

Jang Jooyoung, Head of Equity Investment Division 1 and responsible manager at Korea Investment Management, stated, "Although the Korean stock market is currently experiencing high volatility, we expect the earnings rally to continue, driven by a surge in global AI hardware demand. With additional policy momentum for improving corporate governance, we are facing an unprecedented growth opportunity." He added, "The Korea Investment Level-Up Korea Fund is designed to minimize losses for investors through its differentiated profit and loss structure, and to reflect the performance of key leading stocks during domestic market rallies."

This product, which was launched on July 6, will be available for subscription until July 22 at Korea Investment & Securities and Shinhan Bank PWM Centers.

This content was produced with the assistance of AI translation services.