Korea Growth Investment Corporation splits fund commitments from post-investment management

Korea Growth Investment Corporation has separated its fund commitment and post-investment management functions, effective October 26, in the first reorganization since CEO Jang Sang-ik took office.

The state-backed fund-of-funds manager expanded from two divisions and eight offices to two divisions and nine offices, according to the investment banking industry on November 1. The overhaul replaces a system in which each department handled everything from planning and committing capital to managing the funds it oversaw. Dedicated organizations now handle each function separately.

The company also established a Management Support Office reporting directly to the CEO. It houses an Operations Support Team and a newly created Research and Analysis Team.

How does the new structure work?

Commitment work is now divided mainly between government-linked money and private-sector money.

• Investment Management Office 1 oversees the National Growth Fund, the Growth Ladder Fund and fintech-related funds, which draw funding from the Korea Development Bank (KDB) and the government budget.
• Investment Management Office 2 handles commitments to funds financed by commercial banks and large corporations.

Each office has also assigned separate teams for two fund types: blind funds, whose investment targets are not yet determined, and project funds, whose targets are set in advance.

The Research and Analysis Team will strengthen analysis supporting fund management. The company plans to compile data on the investment records and management performance of the funds it backs, and share it with funding institutions, the government and other stakeholders.

Why the split matters

The IB industry reads the reorganization as a push to strengthen both policy-fund expertise and post-investment verification.

"As policy-oriented funds of funds grow in size and importance, the ability to manage actual investment performance has become just as important as deploying capital," an IB industry source said.

"Now that commitments and post-investment management have been separated, the key will be how much this improves the expertise of fund-manager selection and the objectivity of performance management," the source noted.

The change matters because of the company's role. Korea Growth Investment Corporation is a specialized manager of policy-driven venture capital, established to fund domestic small and medium-sized enterprises, venture firms and innovative companies. It raises money from the government and financial institutions to create funds of funds, then commits capital to sub-funds run by individual investment firms.

What comes next?

Beyond the structural changes, the company is building a task force to construct a database linked to its IT systems. It has also formed a dedicated team to identify new business opportunities and is preparing to enter overseas markets.

Its aims are concrete. It wants to expand connections with overseas investors seeking exposure to Asian markets, including Korea, Japan and Southeast Asia. Over the long term, it is considering ways to attract foreign capital into Korea's venture-capital market.

Who is leading the change?

Jang Sang-ik, born in 1967, took office in June as the fourth CEO of Korea Growth Investment Corporation. He is a venture investment expert who spent 16 years at Korea Venture Investment Corporation, where he held positions including head of the Venture Investment Division. Before that, he worked at Samil PricewaterhouseCoopers and Value Meet Investment, among other firms.

His first year in office now carries a simple test: whether splitting commitments from post-investment management measurably improves fund-manager selection and the objectivity of performance management.