[In-Depth Look at Major VCs]③18 Years Surviving the Overseas VC Wilderness... Korea Investment Partners’ Global Tenacity

18 Years in China: 700 Billion Won Raised Locally
Global Deal Teams Operate Year-Round
Strategic Presence in Key Markets Worldwide
AUM Approaches 5 Trillion Won Including 3 Trillion Won in VC and 850 Billion Won Offshore

Editor's Note
Record amounts of capital are flowing into the venture investment market. As the government's large-scale policy funds go into full operation, major venture capital (VC) firms are also rapidly scaling up. However, simply increasing available funds is not the same as managing them effectively. In this series, The Asia Business Daily will provide an in-depth analysis of the trends in the VC market and Korea's major VC firms in 11 installments. We selected the top houses by assets under management (AUM), excluding those with a high share of private equity (PE). After an overview of the market as a whole, we examine each company's growth trajectory, representative portfolios, investment philosophy and decision-making structure, key people, and organizational culture.

Local subsidiaries overseas and dedicated global deal teams on standby—this is the differentiated strategy of Korea Investment Partners, which executes 30% of its total investments overseas. In 2008, when overseas expansion by Korean VCs was rare, Korea Investment Partners established a subsidiary in China and has since experienced nearly 20 years of changes in the local ecosystem. The Shanghai office is now generating profits as well. Based on its remarkable overseas investment strategy, the firm has established a strong reputation in global deals, including those in the United States. Buoyed by the success of its U.S. and China subsidiaries, Korea Investment Partners now plans to focus its capabilities on investments in Southeast Asia, centered in Singapore.

AUM Reaches KRW 5 Trillion... Achievements in U.S. and China VC Markets

As of last month, Korea Investment Partners' assets under management (AUM) stood at approximately KRW 5 trillion. Of this, VC AUM accounted for about KRW 2.9652 trillion, PE for KRW 1.178 trillion, and offshore AUM for KRW 850.3 billion. Korea Investment Partners focuses its investments in sectors such as ICT services and bio/medical.

According to the SME Startup Investment Company's DIVA electronic disclosure, as of the first half of this year, ICT services accounted for 39.9% of total investments by sector, while bio/medical accounted for 22.9%.

What stands out about Korea Investment Partners' investments is that funds are managed directly on-site in Silicon Valley, Shanghai and Beijing in China, and Singapore. In particular, the China subsidiary has been investing for 18 years since incorporating locally in 2008. The China operation has been rooted in the local market through periods when China was a VC desert, the explosive growth of internet companies like WeChat, the emergence of conflict between the U.S. and China under U.S. President Donald Trump, and the COVID-19 pandemic, adapting to numerous variables. According to Ho Kyung-sik, head of China operations, at a NextRise event this June, the China office has raised a total of KRW 700 billion in local funds.

According to last year's audit report, the subsidiaries Hantoo Penghuang (Zhangjiagang) Venture Capital and Hanpeng (Zhangjiagang) Equity Investment Partnership (Limited Partnership) recorded KRW 9.52 million and KRW 942.75 million in equity method losses, respectively, while Shanghai Yuhan Company (Shanghai subsidiary) achieved KRW 7.06062 billion in equity method gains. The Shanghai subsidiary's performance was the highest among the subsidiaries based on equity method profits and losses. The China operation is keeping a close watch on companies in advanced strategic industries such as semiconductors, artificial intelligence (AI) infrastructure, robotics, and biotech.

The company is also excelling in U.S.-based global deals. Key portfolio companies of Korea Investment Partners reportedly include prominent businesses such as SpaceX, xAI, and Anthropic. CEO Hwang Mansoon of Korea Investment Partners commented, “(The firm’s) share of overseas investment reaches 30%. We are seeing positive results from investments in the United States and China, but additional energy needs to be devoted to Southeast Asia (Singapore).”

He added, “Korea Investment Partners has not only a Silicon Valley subsidiary but also offshore funds, which gives us a relative advantage. Most importantly, we can leverage the halo effect and synergy of the Korea Investment Holdings Group, making it easier to carry out investments. Dedicated teams are organized and operated on an ongoing basis to identify global deals, which is a great help.”

Recent Disappointing Bio Results for the 'Powerhouse'

Korea Investment Partners has built its reputation as a “powerhouse” by investing in a wide range of medical and biotech companies. In the first half of this year alone, the firm invested about KRW 44.5 billion in eight companies, and it has had significant exits via IPOs of companies such as EuBiologics, ABL Bio, and HLB Life Science.

A crucial reason for this reputation is CEO Hwang Mansoon’s background. After transitioning from the pharmaceutical industry to venture capital, CEO Hwang worked at Korea Bio Investment in 2001, then joined Korea Investment Partners in 2009, where he has been investing in biotech companies and managing related funds. CEO Hwang has invested in ABL Bio, LegoChem Biosciences, and established funds such as the Global Pharmaceutical Industry Promotion Private Equity Fund and Korea Investment Re-Up Fund.

However, there have also been some recent disappointing exits in the bio sector. For example, Korea Investment Re-Up Fund holds at least an 8.89% stake in Lameditech, a cosmetics and medical device company, following its listing. As of its IPO in June 2024, Korea Investment Re-Up Fund (9.04%) and Bio Global Fund (2.48%) combined for a total stake of 11.52%. While the share price peaked at KRW 56,000 at the time of listing, it is now around the KRW 2,000–3,000 range.

Excel Therapeutics, which Korea Investment Re-Up Fund held a 6.60% stake in at the time of its listing, has seen its holding decline to 2.62%. The share price, which surged to KRW 11,371 early on, has now plummeted to the KRW 1,000 level. According to last year’s audit report released in April, Korea Investment Re-Up Fund recorded approximately KRW 6.1 billion in equity method losses.

Smooth Progress as GP Selection Ramps Up in 2H... Will a Breakthrough Emerge?

This year, Korea Investment Partners has been repeatedly selected as a general partner (GP) for government-led venture funds, and is expected to actively expand its AUM in the second half of the year, discovering companies with outstanding growth potential.

On July 27, Korea Investment Partners was selected as the final GP in the Ministry of Health and Welfare’s “Parent Fund Investment Project” in the Phase 3 Clinical Biohealth category. Although the initial announcement set the fundraising target at KRW 150 billion, Korea Investment Partners eventually proposed a target of KRW 170 billion. Of the KRW 170 billion, KRW 70 billion will be invested by the parent fund, and Export-Import Bank of Korea and Industrial Bank of Korea will each contribute KRW 10 billion.

The main investment targets are: (1) companies that have completed Phase 2 clinical trials and are proceeding to Phase 3 at home or abroad; (2) companies that are in the process of, or have obtained, conditional drug approval at home or abroad; and (3) companies that are pushing for global or additional Phase 3 trials after domestic approval or Phase 3 completion. At least 60% of total commitments must be invested in these companies.

CEO Hwang said, “We’re still at the stage of explaining the project to other limited partners (LPs), so it’s hard to determine the timing, but we aim to complete at least the first close by next month. Since Phase 3 clinical trials require significant funding, we will prioritize investment reviews of treatments for rare diseases and cancer, as well as drugs targeting conditions with relatively small market sizes.” He further explained, “When it comes to listed companies, the disease area is important, but those with strong intent to enhance corporate value are our first-choice investment targets.”

Overcoming a 17-to-3 competition rate, Korea Investment Partners also secured its footing by being selected as GP for the second sub-fund in the indirect investment area of the National Growth Fund’s policy fund. The fund league that Korea Investment Partners entered is a mid-size league with a target fundraising amount between KRW 200 billion and KRW 400 billion, and must invest a certain percentage in SMEs in advanced strategic industries. Each fund can be finally established up to 200% of its target fundraising amount. CEO Hwang commented, “It should be possible to form a fund worth more than KRW 550 billion before October. We plan to include companies from diverse sectors such as AI, physical AI, security, and biotech in a balanced portfolio.”

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