"Ouch, it's hot..." 55 Companies Throw Their Hats into the Ring for a 15-Year Ultra-Long-Term Technology Fund [fn Market Watch]

[Financial News] Competition for the small and medium-sized sectors of the National Growth Fund's ultra-long-term technology investment fund program diverged sharply. While 41 firms applied for the 80 billion won small-sized sector, recording a ratio of 13.7 to 1, only 14 firms applied for the 160 billion won medium-sized sector, resulting in a ratio of 3.5 to 1. Venture capital (VC) firms gravitated toward the small-sized league, where the burden of retaining private limited partners (LPs) for the fund's 15-year lifespan is relatively lighter.
According to the investment banking (IB) industry on the 7th, Korea Development Bank (KDB) and Woori Asset Management, the lead managers for the program, received proposals to select entrusted fund managers for the ultra-long-term technology investment fund in the indirect investment sector of the 2026 National Growth Fund. A total of 55 VC firms and asset management companies submitted proposals for seven available spots, resulting in an average competition ratio of 7.86 to 1.
The result reflects the calculation that selection would effectively guarantee the formation of the fund, as this is the first structure in Korea in which the Advanced Strategic Industry Fund and government finances cover 77–78% of the total amount.
The small-sized sector attracted a broad range of applicants, from houses with strengths in early-stage deep tech, such as FuturePlay, Bluepoint Partners, and Schmidt, to mid-sized VCs including Dt& Investment, GNTech Venture Capital, NH Venture Investment Co., Ltd., and LSK Investment Co., Ltd. The medium-sized sector was primarily represented by mid-to-large-sized houses with established track records and capital-raising capabilities, including Medici Investment, Smilegate Investment, L&S Venture Capital, We Ventures, KOLON INVESTMENT, INC., Quantum Ventures Korea, and Daesung Private Equity.
The variable that determined the gap in competition ratios was the burden of raising private capital. For the medium-sized fund, with a target formation amount of 160 billion won, the absolute amount that must be raised from the private sector is twice that of the small-sized fund. Securing LPs willing to lock up their funds for 15 years is difficult. The penalty of restricting additional commitments for up to three years from the formation deadline if fundraising fails is another obstacle.
This situation is also evident in the composition of the consortia. In the medium-sized sector, Shinyoung Securities Co., Ltd. and SJ Investment Partners, NH Investment & Securities and SV Investment Corporation, Capstone Partners and DS Investment Partners, Hana Ventures and Hana Securities, and LF Investment and Korea Asset Investment Securities Co., Ltd. joined forces as co-general partners (Co-GPs). In the small-sized sector, DAYLI Partners and SK Securities Co., Ltd., and IBK Securities and KUnicorn Investment also formed partnerships. The strategy is to fill the gap in private-sector matching by leveraging securities firms' financial strength and retail networks.
The lead managers also introduced supplementary measures. Private capital is recognized as meeting the minimum formation amount if it reaches 90% of the target private-sector formation amount. Government finances will enter as subordinated capital, up to 40% of private investors' contributions, serving as a buffer against losses. Fund managers will receive an additional incentive of up to 6% of excess returns based on their investment execution ratio and primary investment ratio—in other words, their rate of exceeding the 110% target for advanced strategic industries.

[email protected] Ganggugwi Reporter