Securities Industry to Invest 1 Trillion Won in Venture Secondary Market to Spur Growth

The securities industry will invest 1 trillion won in venture secondary markets over the next three years to revitalize the exit market for ventures and promote a virtuous cycle of risk capital.

Seongyeop Hwang, Chairman of the Korea Financial Investment Association

On August 31, the Korea Financial Investment Association announced that, together with securities firms, it plans to launch a venture secondary investment project worth approximately 1 trillion won over the next three years. This move responds to market demands to diversify exit strategies, which have so far been focused predominantly on IPOs, despite the expansion of risk capital supply.

The planned funding will proceed through a two-track approach: "individual investments" by securities companies and the creation of a "joint fund." Approximately 618.5 billion won will be invested by the seven major investment banks capable of operating promissory notes and comprehensive investment accounts (IMAs)—Mirae Asset Securities, Shinhan Investment, NH Investment & Securities, KB Securities, Kiwoom Securities, Hana Securities, and Korea Investment & Securities. If additional comprehensive financial investment business licenses for promissory notes are granted and new participants join, the investment scale could increase to approximately 700 billion won.

The joint fund will be set up in 2025 with around 300 billion won led by the top 15 securities firms by operating profit (Kyobo Securities, Daishin Securities, Meritz Securities, Mirae Asset Securities, Samsung Securities, Shin Young Securities, Shinhan Investment, NH Investment & Securities, Yuanta Securities, KB Securities, Kiwoom Securities, Toss Securities, Hana Securities, Korea Investment & Securities, Hanwha Investment & Securities) and the Korea Financial Investment Association. This fund is expected to provide stable liquidity to the venture exit market and serve as a catalyst for the revitalization of the private-led secondary investment market. The Korea Financial Investment Association plans to publicly announce the selection of a management company for the joint fund, complete the selection and capital commitment process, and then commence full-scale investment activities.

If this 1 trillion won plan is combined with the up to 1 trillion won in support that related organizations in the securities industry are currently preparing, a total of 2 trillion won of substantial capital is expected to be provided to the venture exit market through the financial investment sector.

Sungyeop Hwang, Chairman of the Korea Financial Investment Association, stated, "This plan is significant in that it marks the active participation of the securities industry in building an ecosystem for the growth of ventures and innovative firms," adding, "We will continue our efforts to vitalize the venture exit market and further expand the supply of risk capital."

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