Shinhan Financial Group is forming a 100 billion won private venture fund of funds and moving to expand investment in advanced industries and regional innovative companies.

Shinhan Financial said on Thursday it has completed the formation of the private venture fund of funds, "Shinhan Venture Nexus Fund of Funds No. 1," which it announced in April.

The fund of funds was created through joint contributions from group units including Shinhan Bank, Shinhan Card, Shinhan Investment Corp and Shinhan Capital. Shinhan Venture Investment will manage it.

Shinhan Financial plans to invest through the fund of funds in a fund of funds managed by domestic venture capital firms. It also aims to attract additional private capital and build feeder funds totalling 1 trillion won.

Key investment areas are national advanced strategic industries such as artificial intelligence (AI) and regional innovative industries. Shinhan Venture Investment plans to select strong external managers based on its direct investment experience and industry expertise in innovative industries.

Shinhan Financial will also use the fund of funds to strengthen its role as the group's venture investment platform. It aims to expand Shinhan Venture Investment's direct investment capabilities into fund-of-funds investing and broaden the group's system for supplying risk capital.

It will also support the regional venture investment ecosystem. Shinhan Financial plans to participate in venture funds with a share of local investment and in the creation of a growth fund for limited partners by the Ministry of SMEs and Startups and Korea Venture Investment Corp.

Shinhan Venture Investment plans to select external managers through a first-round capital commitment notice in the third quarter and then sequentially proceed with the formation of feeder funds.

A Shinhan Financial official said, "With the formation of this fund of funds, the group's productive finance strategy is leading to tangible results," and added, "We will continue to support investment in future growth industries and the revitalisation of the venture investment ecosystem."