Government Launches 880 Billion Won Super Long-Term Technology Investment Fund... 15-Year 'Patient Capital' Supply

77% Policy Fund Contribution:
Investing in Next-Generation Technologies
such as Semiconductors and New Drugs

Easing the Private Sector's Burden
to Deliver Long-Term Venture Capital

The government will establish an "Ultra-Long-Term Technology Investment Fund" worth 880 billion won to support advanced industries that require extended investment horizons, such as next-generation semiconductors and cutting-edge pharmaceuticals. The fund will have a lifespan of 15 years to provide long-term venture capital, and more than three-quarters of the total capital—680 billion won—will be contributed with policy funds, greatly easing the burden on private investors.

Eokwon Lee, Chairman of the Financial Services Commission, is speaking at the public hearing for the launch of the "Ultra-Long-Term Technology Investment Fund" held at the Korea Development Bank IR Center in Yeouido, Seoul, on the afternoon of the 20th. Provided by the Financial Services Commission.

Speaking at the launch public hearing for the Ultra-Long-Term Technology Investment Fund held at the Korea Development Bank IR Center on July 20, Eokwon Lee, chairman of the Financial Services Commission, stated, "Securing fundamental technologies for the future and localizing core technologies of major industries are absolute necessities amid the intensifying global investment war. The National Growth Fund should actively invest in technologies that require a long period to mature."

The Financial Services Commission plans to announce a call for fund managers for the newly created Ultra-Long-Term Technology Investment Fund, which will be established under the National Growth Fund, in the third quarter. The fund aims to make long-term investments—spanning over 10 years—in advanced industries including next-generation semiconductors and innovative pharmaceuticals, with plans to expand targets to include the aerospace sector in the future. In addition, a specialized asset management company, Korea Strategic Technology Partners (KSTP), will be established to support investments in future foundational and core technologies.

The fund is structured to focus on long-term investment. It is designed with a 15-year lifespan and a 7-year investment period, providing ample time from technology development through commercialization. The goal is to supply "patient capital" that supports companies as they grow over an extended period. Of the fund’s total capital of 880 billion won, the Advanced Strategic Industry Fund will contribute 600 billion won and the government budget will add 80 billion won, for a total of 680 billion won in policy funds. This significantly reduces the amount of capital required from private investors.

The selection criteria for asset managers will also be differentiated from previous standards. Evaluations will focus not only on financial statements but also on expertise in technology assessment and the capabilities of key management personnel. Asset management firms that secure specialized technical personnel and implement effective compensation systems for them will be provided with incentives.

Chairman Lee emphasized, "The Ultra-Long-Term Technology Investment Fund should be a fund that grows alongside companies. We will provide incentives for continuous follow-up investment, and are also considering imposing penalties for asset managers that recover their investment earlier than intended, in ways that go against the fund's objectives."

Sangjin Park, Chairman of the Korea Development Bank, is speaking at the launch hearing of the "Ultra-Long-Term Technology Investment Fund" held at the KDB IR Center in Yeouido, Seoul, on the afternoon of the 20th. Provided by Korea Development Bank.

Industry experts participating in the panel discussion at the hearing highlighted that fields such as quantum computing, aerospace, and advanced biotechnology often require at least 10 years to reach commercialization and returns on investment. They pointed out that follow-up investments frequently stop just before the achievement of critical milestones, emphasizing the need for policy funds to address this gap. However, with regard to investment structures, some noted that while the exclusion of redeemable convertible preferred shares (RCPS) would reduce repayment pressure for recipient companies, it could also limit protection for investors.

The Financial Services Commission intends to finalize the fund operation plan by taking into account the feedback gathered at the hearing, then proceed with the process of selecting fund managers. Following the recruitment of private capital, full-scale investment is expected to begin as early as the end of this year.

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