National Sports Promotion Fund, Trade Insurance Fund commit capital in quick succession

Pension money flows into innovation-focused investments in earnest

Samsung Asset Management, Korea Growth Finance build collaborative investment model

The "Pension Fund National Growth No. 1," established through the pension investment pool system, raised a cumulative 110 billion won ($71.6 million) within a week of its launch — the fastest any alternative investment product in the pension pool has surpassed the 100 billion won mark.

The Ministry of Planning and Budget announced Wednesday that the fund had reached 110 billion won in cumulative subscriptions within seven days of its opening on June 9.

A screen in the lobby of Woori Bank's headquarters in Jung-gu, Seoul, displays information about the public-participation National Growth Fund in May. [Yonhap]
A screen in the lobby of Woori Bank's headquarters in Jung-gu, Seoul, displays information about the public-participation National Growth Fund in May. [Yonhap]

The fund opened on June 9 on the back of a capital commitment from the National Sports Promotion Fund, and subsequently crossed the 100 billion won threshold after the Korea Trade Insurance Fund confirmed an additional contribution of about 80 billion won.

The pension investment pool system consolidates surplus funds from individual public funds into a collective investment vehicle. Introduced in 2001, it aims to improve investment efficiency and achieve economies of scale for participating funds.

The Pension Fund National Growth No. 1 is an innovation-focused investment product built on this pool framework. Samsung Asset Management, the lead manager of the pension investment pool, designed and launched it in partnership with Korea Growth Finance. The fund invests across a range of innovation-growth areas, including sub-funds under the National Growth Fund umbrella.

It is the second innovation-growth product offered within the pension investment pool, following last year's "LP First Step Fund," a 40.5 billion won vehicle that channeled capital into venture companies.

A distinctive feature of the new fund is its "pooling investment" structure, which co-manages capital across multiple funds. By consolidating assets from several funds, the design lowers the participation threshold for smaller funds and allows for a larger overall investment scale.

The investment structure operates in three tiers. Participating funds first contribute to an integrated vehicle — the "Pension Pool National Growth No. 1" — managed by Samsung Asset Management. That integrated fund then invests in a sub-fund, the "Pension Fund National Growth Matching No. 1," managed by Korea Growth Finance, which in turn channels capital into National Growth Fund sub-funds and other vehicles targeting advanced industries and innovation-growth sectors.

The result also reflects policy reforms the government has pursued since early this year. Through its "Basic Direction for Fund Asset Management" guidelines for this year, the Ministry of Planning and Budget identified investment in innovation-growth sectors as a core priority for uncovering future national growth engines and strengthening the public role of state funds.

In addition, a revision to the "Fund Management Evaluation Guidelines" doubled the bonus score for innovation-growth investment from one point to two, and explicitly included the National Growth Fund in the evaluation criteria for public-interest efforts, strengthening the overall assessment of public-function performance.

Earlier, the government introduced the National Growth No. 1 Fund at a pension investment pool financial seminar held May 29 for asset managers at pension funds and public institutions. The event was used to build consensus on the need to expand investment in innovation-growth sectors and on the productive role public capital can play.

The Ministry of Planning and Budget said the pension investment pool's net asset value stood at 90.2 trillion won as of the end of May, putting it on the cusp of the 100 trillion won milestone. The ministry said it plans to continue developing related investment products so that public capital can serve as a catalyst for innovation growth, going beyond simply improving returns.

The National Growth Fund is being built up to a scale of 150 trillion won over the next five years to foster strategic advanced industries. This year's indirect-investment management plan sets a fundraising target of 6.22 trillion won, divided between general policy funds (5.5 trillion won) and public-participation funds (720 billion won). Of that total, private capital accounts for 3.99 trillion won, with pension funds participating as private investors in the general policy fund portion.


y2k@heraldcorp.com