'KRW 150 Billion K-Culture' Three-Way Race Between Nautic, Midas and Saehan [fn Market Watch]

[Financial News] Nautic Investment, Midas Private Equity (PE) and Saehan Venture Capital are competing in a three-way race for the general partner (GP) position in the artificial intelligence (AI) and intellectual property (IP) sector, the core segment of the KRW 150 billion K-Culture Value-Up Fund being created by the government to foster K-culture.
Because half of the KRW 100 billion target fund must be raised from the private sector, fundraising capacity and experience investing in and enhancing the value of K-culture assets will be key deciding factors.
According to investment banking (IB) industry sources on the 3rd, Korea Growth Investment Corporation (K-Growth) selected the three firms for the shortlist in the AI and IP sector of the K-Culture Value-Up Fund.
One firm will be selected as the final manager after presentations later this month. The structure involves K-Growth committing KRW 50 billion in policy funds to create a fund worth at least KRW 100 billion.
For the content innovation sector, one GP will be selected separately to create a fund worth at least KRW 50 billion, with KRW 30 billion in capital commitments.
Nautic Investment is highlighting its fundraising and buyout value-up experience. It has formed 14 funds since its establishment and created a KRW 100 billion second blind fund with commitments from K-Growth and the Fund of Funds. Last year, it acquired education content company TIME EDUCATION and is pursuing the introduction of AI and bolt-on acquisitions. All 10 funds it has liquidated were exited without losses.
Midas PE's strength lies in structured investments. It participated as a key financial investor (FI), acquiring KRW 33 billion worth of convertible bonds (CBs) when be my friends, the operator of fandom platform b.stage, acquired Dreamus Company. It has also invested a cumulative KRW 70 billion in adjacent K-culture sectors, including K-beauty, advertising and content.
Saehan Venture Capital stands out for its track record in AI, IP and K-culture investments, which directly aligns with the purpose of this capital commitment.
Its strengths include investments across the entire value chain, from AI to character and content IP, K-pop, fandom and commerce, as well as actual exit results. In 2021, it invested KRW 23.3 billion in Scatter Lab, the operator of AI character platform Zeta, achieving a 3.5x multiple on invested capital (MOIC). This was an early investment in a business model that expanded AI technology into IP centered on characters and fictional universes. In K-pop, it invested KRW 42.5 billion in The Black Label, the agency representing Rosé, achieving a 3.2x MOIC, and made a follow-on investment in its Series B round in May this year. It has also broadened its investment base into fandom and commerce, including be my friends and K-pop merchandise commerce platform MAKESTAR. Its investment of KRW 2 billion in Krafton in 2008 generated a 72.7x MOIC.
IB industry sources assess that Nautic has strengths in fundraising and buyouts, while Midas PE excels in structured finance. Saehan Venture Capital, meanwhile, has a relatively clear track record in investment and exits spanning AI, IP and K-culture.
A senior IB industry official said, "Ultimately, fundraising capacity to attract KRW 50 billion in private capital and the ability to translate AI and IP into actual increases in corporate value are expected to determine the final outcome."
[email protected] Kang Gwi-gui Reporter