Woori Financial Group said on Wednesday that Woori Bank and Woori Asset Management will participate as key partners in the government-led Future City Fund and support first-generation new town redevelopment projects.

The fund was created to respond to redevelopment demand in first-generation new towns totalling about 530,000 households, including Bundang, Ilsan, Pyeongchon, Sanbon and Jungdong.

Woori Bank will invest 480 billion won in the first 600 billion won master fund under the 12 trillion won Future City Fund project, making it the largest investor. Linked to a guarantee from the Housing and Urban Guarantee Corp (HUG), it plans to provide low-interest initial project costs of up to 20 billion won for each project site.

Woori Asset Management will manage the fund. Woori Asset Management was selected as the manager for the first master fund after competing with large asset managers. The company said it plans to use the selection as a momentum to expand its management scope into alternative investments and the policy fund market.

All major investors have completed signing their investment commitments. The Future City Fund will be operated through a capital call method, under which contributions are paid in line with the timing of fund disbursements.

Jin-kyung Lee (이진경), a team leader at Woori Bank's structured finance division, said it would help ease initial funding difficulties for aging new town redevelopment and lay the groundwork for stable project execution. Lee said the bank will continue to expand structured finance linked to policy finance and play a role in improving the health of the real estate project financing market and residential environments.