South Korea Financial Services Commission reviews investment strategies and oversight for KRW 630 billion second Public Participation Growth Fund

South Korea's Financial Services Commission (FSC) reviewed investment strategies and oversight arrangements for the second Public Participation Growth Fund at a meeting chaired by Vice Chairman Shin Jin-chang. Following the close of sales on Oct. 15, which raised about KRW 520 billion, 10 subfund managers will manage approximately KRW 630 billion, including government funding. The investment mandate requires at least 30% of fund capital to provide new financing to unlisted companies or companies admitted under KOSDAQ's special technology listing regime. Including those investments, at least 60% must support advanced strategic industries, such as artificial intelligence, semiconductors and biotechnology. Managers plan to prioritize new financing early in the investment period and diversify portfolios to avoid concentration in individual holdings. Korea Development Bank, Korea Growth Investment Corporation and the three public fund managers will continuously monitor investments and establish a risk management framework. Addressing concerns about the first fund's 0.5% return as of Sept. 11, Vice Chairman Shin emphasized that performance should be assessed over a longer horizon. The fund matures after five years, restricts redemptions and invests in unlisted shares and mezzanine instruments whose valuations cannot always be established immediately. He also reiterated the existing protection structure, under which government capital and managers' subordinated contributions absorb approximately the first 20% of losses before public investors bear losses.