April 19, 2024

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As South Korea’s venture investment hit a record high last year, Korea Venture Investment, South Korea’s fund of funds management institute, saw a jump in revenue growth, data from the Financial Supervisory Service showed on April 4.

KVIC logged operating sales of 22.9 billion won ($20.1 million) and operating profit of 6.4 billion won, growing 38.59 percent and 385.76 percent, respectively. Its revenue soared 456.01 percent to 5.3 billion won during the same period, the company’s financial statement showed on April 5.

KVIC was founded in June 2005 to provide stable funding to the country’s venture companies with limited partners including Korea SMEs and Startup Agency, Korean Intellectual Property Office and various ministries. 

The increase in fund management fees, which propelled its revenue growth, was mainly due to the expansion of the size of the fund of funds. The government decided to inject 1.9 trillion won in 2017 through additional budget injection to create venture funds worth 4.6 trillion won, 800 billion of which were exercised.

The management fees for operating funds of funds doubled from 9.6 billion won in 2013 to a total of 20 billion won in fund management fees last year. Out of the 20 billion won, 18.3 billion won was generated by managing funds of funds.

The financial health of the company that has 4.29 trillion won worth of asset under management reflects South Korea’s venture boom last year. A total of 3.43 trillion won was invested in startups in 2018, up 43.9 percent from the previous record high of 2.38 trillion won in 2017, according to the data from the Ministry of SMEs and Startups.

The company also bagged dividends or performance bonus from some funds such as KoFC-KVIC I and II, which aims to create jobs.

The country’s venture investment is likely to continue to boom this year with the government’s plan to allocate 1 trillion won in venture funding this year.

By Park Ga-young (gypark@heraldcorp.com)