South Korea's Ministry of Science and ICT held a ceremony and investor relations event on Monday at TP Tower in Seoul's Yeouido to mark the formation of the first science and technology innovation fund and announce the start of full-scale investment.
The science and technology innovation fund is a science and technology-focused fund formed under private leadership without government investment to focus on the 12 national strategic technology fields and technology commercialisation companies. The target is to build a fund of about 1 trillion won.
Shinhan Bank, IBK Industrial Bank of Korea and Woori Bank, which serve as the dedicated banks for the research expense management system that deposits and manages national research and development (R&D) funds, will create a 494.0 billion won parent fund over four years. Based on this, they will attract private investment and form and run multiple sub-funds each year.
After the Ministry of Science and ICT, the dedicated banks, the National Research Foundation of Korea and Shinhan Asset Management signed a business agreement in February last year and decided to form the fund, the ministry confirmed five of the 12 strategic technology fields as the first fund's priority investment areas.
As a result of selecting fund managers for each priority investment area through an open call conducted through the end of last year, sub-funds totalling 763.2 billion won were formed across five areas: semiconductors and displays (401.0 billion won), artificial intelligence (144.0 billion won), advanced mobility (49.0 billion won), advanced bio (107.6 billion won) and quantum (61.6 billion won). This is about three times the initially targeted amount of 255.9 billion won.
Each sub-fund plans to invest at least 30 to 40 percent of its target amount in companies in its priority area, and at least 15 to 20 percent of any amount raised above the target. It also plans mandatory investment of at least 60 percent of the target amount in companies across the 12 national strategic technology fields, including the priority area, and at least 40 percent of any amount raised above the target.
At the event, companies selected through a prior open call that seek to attract investment and sub-fund managers gave presentations on company status and held investment consultations. At the fund formation ceremony held in the afternoon, participants including Deputy Prime Minister Kyung-hoon Bae (배경훈), who also serves as science minister, heads of the dedicated banks and representatives of parent and sub-fund managers celebrated the formation of the first fund and shared plans for future fund operations.
Bae said the science and technology innovation fund was successfully formed, securing major momentum to support companies in national strategic technology fields. He said he would continue efforts to expand incentives for private investment and broaden an atmosphere of support so that companies with strong technological capabilities can grow.