[Deep Dive into Major VCs]②IMM Investment Steps Up for the '53 Trillion Won Maturity Bomb'..."Maintaining Zero Losses in Secondary Funds"

Secondary Funds Deliver 20.6% IRR Upon Liquidation
New Seventh Fund This Year, Secures 155 Billion Won from Policy and Pension Funds
“Unicorns Emerge in Bubbles” – Aggressive AI Bets
Unpredictable Market… Stresses “Immunity to Change”

Editor's Note
A record amount of capital is currently being released into the venture investment market. As the government’s large-scale policy funds come into full operation, major venture capital (VC) firms are rapidly scaling up as well. However, having more money and managing it well are two different matters. In this series, we will conduct an in-depth analysis of trends in the VC market and the leading VC firms in Korea across eleven installments. We have selected firms with the highest assets under management (AUM), excluding those with a high proportion of private equity (PE). After surveying the market as a whole, we will delve into each company’s growth trajectory, representative portfolios, investment philosophy and decision-making structure, as well as the key figures and organizational culture.

Starting this year, there will be a surge of domestic venture fund maturities. Of the funds established between 2019 and 2022, the total amounts to 53 trillion won, and among these, 17 trillion won will mature and require settlement in 2026. To repay investors, matured funds need to convert equity holdings into cash by selling them. This is where secondary funds come in as the buyers of these stakes. However, in Korea, most secondary venture funds are formed with less than 50 billion won in capital. This creates a lack of capacity to handle situations where funds of several hundred billion won attempt to liquidate entire portfolios at once.

IMM Investment has stepped forward to fill this gap as a relief pitcher. The firm is currently raising a fund with a hard cap of 300 billion won this year. This will be its seventh secondary series fund—an unusually large scale in the domestic market. So far, 155 billion won in policy capital from institutions such as Korea Development Bank and pension funds has already been committed. A representative from IMM Investment explained, “As off-market sales account for the largest proportion of VC exit channels, the role of large secondary funds has grown—to absorb liquidity demand from maturing funds and recycle returned capital into new investments,” adding, “Expanding our lineup of secondary funds is precisely why policy institutions have been increasing their commitments to the exit market.”

This influx of policy capital into IMM Investment’s secondary fund is backed by the performance of its previous funds. The firm’s third secondary venture fund, liquidated in June, returned 1.96 times the principal to its investors. “Our completed secondary funds have generated an average multiple of 1.8x,” said a company official, “with an internal rate of return (IRR) of about 20.6%. Not a single fund finished with a loss.”

Holding 5.5 billion won for 9 years... Returned at 11.4 times

IMM Investment is organized into three divisions: Venture Investment, Growth Equity, and Infrastructure. Following a restructuring in 2024, the Venture Investment Division further split into teams focused on early-stage and technology companies, growth investment, and secondary investments.

In terms of investment criteria, three key changes have been made over the past three years: ① Selectively concentrating resources on areas with clear benefits from structural change, such as the value chain shift driven by artificial intelligence (AI), ② Planning multiple exit scenarios—including secondary sales and strategic M&A, not merely IPOs—at the investment review stage, and ③ Institutionalizing a collaborative system where corporate insights gained during the venture stage are carried over to follow-on and growth equity investment. The firm’s investment in Krafton, a representative portfolio, is the prototype of this strategy.

IMM Investment’s Venture Investment Division invested 5.5 billion won into the game developer Bluehole Studio (now Krafton) in 2009. At that time, a decision could not have been made based on financials alone. However, by joining the board and directly monitoring development progress, the firm proceeded with two follow-on investments in 2014 and 2018. In 2018, its Growth Equity Division participated in the pre-IPO round. In this way, the growth division picked up a company that the venture division had followed and supported for nine years.

Measuring the exit, the firm did not divest all at once. In 2018, a partial stake was sold in a cross-border third-party transaction to avoid tying all performance to the listing schedule. The remainder was sold during and after the company’s IPO in 2021. The final venture-phase results were a multiple of 11.4x and an IRR of 109%.

The same approach has been applied in other deals. APR, invested in between 2019 and 2020, was entirely sold following its 2024 listing on the KOSPI, generating a multiple of 10x and an IRR of 69%. Shift Up was entered at the Series C round in 2022, with 50 billion won realized at its 2024 IPO.

‘Selection and Focus’ for Investment Targets... A Lineup of Engineers, Doctors, Pharmacists, and Other Experts

The company has a set method for choosing investment targets. Ilboo Jeong, CEO of IMM Investment, said, “We first look at trends, and then assess whether a person or company has the skills and leadership to navigate them. The key is whether top talents willingly gather around the founder with the resolve to go all the way—something that cannot be replaced by AI.”

Another defining trait is the preference for concentration over diversification. CEO Jeong named this as a core principle: “Rather than investing like a department store spreading our efforts across every field, we anticipate trends and prepare ahead with focused selection.”

The firm’s personnel are also different from typical VCs. The Venture Investment Division includes specialists in semiconductors, AI, as well as physicians, pharmacists, and IPO experts. The secondary investment team is even more specialized: Of its six managers, four come from brokerage houses and one from the Korea Exchange, reflecting their view that trading pre-owned shares is more akin to capital markets work than general venture investment.

Performance-based compensation is only distributed after the company actually receives payment from the fund. Managers also commit their own capital to the funds they manage, with the company providing a lending program for this purpose. “It’s designed so that the investment officer is responsible for execution through to exit,” explained IMM Investment.

Confronting the ‘AI Bubble Theory’… “Building Immunity to Change Is Key to Survival”

In April, IMM Investment formed a consortium with Stonebridge Capital to acquire a 49% stake in SK Group’s Ulsan AI Data Center together with KKR. Of this, KKR will take 29%, and the consortium will receive 20%. Given KKR’s total investment of 1.8 trillion won, the consortium’s portion also amounts to several hundred billion won. Compared to its assets under management of 10.1 trillion won, this is a heavyweight deal by any measure.

Despite growing concerns over burdensome AI valuations, CEO Jeong asserts that “The AI industry needs a bubble,” emphasizing the need for an aggressive response. Only through bold challenges and experimentation in such an environment, he argues, can foundational technologies and unicorns be discovered. Regarding criticism that valuations for its previous investments in Rebellion and FuriosaAI are too high, he responded firmly, “We’re investing in their technological capabilities and future potential.”

However, the company does acknowledge that overconcentration in particular sectors needs attention. “We are actively monitoring internally the growing valuation pressures as capital floods into AI and deep tech,” noted a company representative, “and we are mitigating this with sector diversification and carefully structured entry strategies.”

The venture division is pursuing a balanced approach with investments spanning bio-healthcare, consumer, semiconductors, space-aerospace, and robotics outside of AI. Tools such as redeemable convertible preferred stock are used to hedge downside risk, and when a company’s growth is validated, secondary investment follows. New investments this year have been spread across Kakao Healthcare (digital healthcare), InnoKRAS (precision cancer diagnostics), Holiday Robotics (robotics), and CosmoV (space-aerospace).

CEO Jeong likened the present market to “an era of permanent volatility, like being in a constant state of influenza,” saying, “Ultimately, it’s all about building the stamina and immunity to withstand and adapt to any crisis. That is the core element for survival.”

<To be continued in the series>

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