이 기사는 2020년 02월 26일 08시00분 thebell에 표출된 기사입니다

South Korea’s venture capital (VC) fund-of-funds operator Korea Growth Investment Corp. (K-Growth) has released a guideline for its invested funds that seek to invest in overseas markets, allowing such investment activity in a limited manner.

K-Growth and the state-run Korea Development Bank (KDB) are currently in the process of selecting alternative managers to allocate a combined 880 billion won. They plan to construct the portfolio with four strategies based on the venture cycle: later-stage companies, growth companies at the scale-up stage, innovative companies at the scale-up stage and early-stage companies.

This investment program is especially popular among domestic VC firms seeking a higher net return. Selected firms are supposed to raise a combined 2.5 trillion won – including anchor capital from K-Growth and KDB – for their new funds.

In its recent announcement of the investment program, K-Growth has also provided a clear guideline on overseas investments by its invested funds. The move is seen to correct the misunderstanding, as many domestic VC firms have assumed that such investment activity is not allowed in this investment program given its government-backed financing structure.

K-Growth’s invested funds are allowed to invest in companies founded by domestic companies in overseas countries as well as joint ventures founded by domestic companies in partnership with overseas companies, according to the guideline. They can also deploy capital to overseas companies in which they make investments together with domestic industry partners. In a broader view, K-Growth means to allow overseas investments as long as they are related to domestic businesses.

With regard to direct investment in overseas companies, K-Growth said it would allow such deals only if they are expected to result in growth of domestic industries in coming years.

K-Growth's move reflects high demand for overseas assets among VC firms. Investment in overseas assets could provide greater opportunities for higher returns. That could be especially true for VC managers with funds dedicated to companies at the scale-up stage.

“I heard several large VC firms are reviewing the K-Growth’s investment program to submit proposals after the guideline for overseas investments was released,” said an industry insider.

(By reporter Lee Youn-jae)