The year the Sewol ferry sank with 476 people aboard was a traumatic one for many South Koreans. The 2014 tragedy brought many changes to the country, most notably the impeachment of former President Park Geun-hye in 2016. It was also a turning point in the way people perceived investment.
“I think that’s when people started to ask whether the current status of capitalism, the conglomerate-led system, and our democracy were OK,” said impact investment-focused Crevisse Partners founder and CEO Kim Jae-hyun in an interview with The Investor. “Explaining the concepts of social ventures and impact investment has gotten easier, and at least I no longer see people who distort the idea of social investing.”
Impact investment means considering both the financial and social impact of investment decisions, taking into account aspects such as job creation and environmental protection.
Coincided with the renewed public attention, Crevisse, which started as a small social venture firm and now has four units including a venture investment arm, has seen a double-digit growth since 2014.
Crevisse Founder and CEO Kim Jae-hyun
Crevisse Ventures, the investment unit, has 40 billion won ($34.58 million) under management, including the 20 billion won Crevisse-Lime Impact Venture Fund, the first impact fund funded by K-Growth -- short for the Korea Growth Investment Corp. -- and the first joint effort between an impact-focused company and a private equity fund.
The joint fund with Line Asset Management has invested in Todo Works, which uses internet of things technology to produce devices that add extra functions to wheelchairs, and Aria Care Korea, which provides nursing care for elderly people. It has also invested in proptech firm Space Works, peer-to-peer lending platform Lendit and local coffee chain Terarosa.
Kim said his company would seek to establish a stronger foundation for impact investment here, as Korea plays catch-up with the idea of chasing both social virtue and financial returns. Major investment companies such as Goldman Sachs and Blackrock have also begun to stress impact investment, and the number of impact funds is on the rise, according to Kim.
“In Korea, impact investment is focused on venture firms -- really big investments, capable of creating a major impact, have yet to be seen. But I bet we will soon see investments with significant impact in finance, housing, environment and energy,” said the CEO.
As an investor, he believes it is important to spearhead innovation to support companies that alleviate social problems. To do this, Crevisse plans to set up a second impact fund later this year. Expected to be larger in size than the previous fund, it will strengthen the foundation of impact investment in the country, Kim said.
When asked about Crevisse’s ultimate goals, Kim said he would like to acquire a troubled company and turn it into an entity that can create a solid, positive impact.
“It’s like acquiring SsangYong Motor and turning it into Tesla,” he added.
SsangYong Motor is Korea’s fourth-largest automaker, now owned by Indian automotive company Mahindra & Mahindra. It was previously owned by Chinese automobile manufacturer SAIC and suffered financial problems that led to a corporate workout and even some employee suicides.
“We want to go step by step to make real changes in the society we live in,” said Kim.
By Park Ga-young (email@example.com)