The Ministry of SMEs and Startups (MSS) held the 2026 Fund-of-Funds Investment Strategy Committee, reviewing 2025 performance and discussing plans for 2026. The committee, launched in 2024, gathers industry and expert opinions to ensure market-friendly fund management and strengthen public-private cooperation. Key figures, including Minister Han Sung-sook, leaders from the Korea Venture Business Association, Korea Venture Capital Association, and Korea Financial Investment Association, as well as experts in AI, bio, and global sectors, attended the meeting. The agenda covered fund performance, regional growth fund plans, and future development strategies.
In 2025, the fund-of-funds invested KRW 1.3 trillion, creating KRW 3.3 trillion in venture funds and supporting the emergence of three unicorns: FuriosaAI, Vinau, and Galaxy Corporation. Notably, 74% of KOSDAQ-listed companies were backed by sub-funds, highlighting the fund’s pivotal role in fostering innovation. The average annual IRR for sub-funds liquidated in 2025 was 7.5%, close to the cumulative average of 8.0%. Regional funds achieved a 9.7% return, demonstrating the potential of local industry investments. For 2026, the MSS plans to invest KRW 1.6 trillion, accelerating AI and deep-tech unicorn development and strengthening the venture investment platform.
The 2026 fund-of-funds will allocate a total of KRW 1.63 trillion across next-generation unicorn projects, private partnerships, regional market support, and exit activation. Key strategies include focused investment in AI and deep-tech, attracting private and global investors, and supporting underfunded areas such as early-stage startups, youth, and re-challengers. The fund will also promote M&A and secondary markets, introduce a 20% regional investment requirement, expand fee incentives for early investments, and extend special provisions for secondary share purchases until 2030.
The regional growth fund aims to establish at least one fund in each of the 14 non-metropolitan provinces over the next five years, with KRW 2 trillion in parent funds and KRW 3.5 trillion in sub-funds. Incentive packages for investors include enhanced loss mitigation, profit-sharing options, lower RWA for private banks, and incentives for public institutions. To improve transparency, the MSS will introduce a disclosure system and establish a new operations committee, while extending fund duration and clarifying reinvestment procedures. Minister Han emphasized the fund-of-funds’ pivotal role in Korea’s venture market growth and pledged to strengthen its platform function to support a KRW 40 trillion annual venture investment market.
The 2026 strategy marks a significant step toward fostering innovation and regional balance by prioritizing AI and deep-tech unicorns while expanding regional growth funds. Attracting private and global capital will enhance the resilience and competitiveness of Korea’s venture ecosystem. The introduction of transparency measures and a new operations committee is expected to boost policy credibility and encourage greater private sector participation, supporting sustainable and qualitative growth in the Korean venture investment market.