Pension Fund Investment Pool Makes First Venture Investment in 24 Years... 40.5 Billion Won Master Fund Created

[Financial News] The pension fund investment pool is entering the venture market for the first time. The Ministry of Strategy and Finance plans to create a 'LP First Step Master Fund' worth 40.5 billion won through the pension fund investment pool and invest in venture companies as early as the end of this year. This is the first venture investment made since the launch of the pension fund investment pool 24 years ago, and it is evaluated as a signal that the operation strategy of public funds is shifting to a policy finance tool.
 According to the Ministry of Strategy and Finance on the 22nd, the '89th Investment Pool Operations Committee' was held under the chairmanship of Vice Minister Im Gi-geun to discuss the appropriateness of investment in the LP First Step Master Fund, which invests in venture companies, and to review and approve the selection of new weekly operating companies.
 The 'LP First Step Master Fund' being created this time is structured to encourage the market entry of first-time investors without venture investment records through joint investment by the pension fund investment pool and the mother fund.
 The Trade Insurance Fund, as an investment entity among pension funds, will invest 20 billion won, and the mother fund will add 20 billion won, creating a total venture fund of 40.5 billion won by early August. Korea Venture Investment will also be responsible for 500 million won as the operating company (GP).
 This investment is the first venture investment made through the pension fund investment pool since the introduction of the investment pool system in 2001.
 Until now, venture investments have been individually implemented mainly by large pension funds such as the National Pension Service, but the performance has been poor.
 In particular, there has been no venture investment performance in the pension fund investment pool, which is mainly composed of small and medium-sized funds. This investment marks a change for the first time in 24 years since the system was launched.
 The investment method has also become more flexible. A 'Venture Investment Dedicated Integrated Fund' will be set up within the pension fund investment pool, and investments in actual venture companies will begin by the end of the year through the selection of sub-funds. A priority loss compensation structure to reduce loss risk and a put option favorable to investors are also included.
 The meeting also reviewed and approved the selection plan for weekly operating companies. As the business period of existing operating companies ends in December this year, two new weekly operating companies will be selected through a Public Procurement Service bid by the end of September. With the system reform in February this year, securities companies can also participate in the bidding, expanding the basis for effective competition.
 Vice Minister Im Gi-geun said, “It is time for pension funds to actively support the new government's core strategic agendas such as strengthening industrial competitiveness in areas like AI, responding to carbon neutrality and climate crisis, and addressing regional extinction.” He added, “With this first venture investment by the pension fund investment pool, we will expand the base of the venture market by investing in innovative venture fields such as AI, and in the process, we will establish a virtuous cycle structure that simultaneously secures the profitability and stability of the fund.”



spring@fnnews.com Lee Bo-mi Reporter