Shinhan Financial Group plans to set up a new unit that will take charge of venture investments, according to industry sources on July 18.
The venture capital unit will operate a 200-billion-won ($169 million) fund of funds portfolio, which involves holding other investment funds rather than investing directly in stocks, bonds or other securities. It is seeking startups that could create synergies with the financial group.
The establishment of the VC unit is part of the group’s on-going efforts to seek future growth engines and back the country’s venture industry. It set up incubator unit Shinhan Future’s Lab in 2015.
In March, it launched a committee consisting of 2,000 executives from 14 affiliates to spur innovation, headed by Shinhan Financial Chairman Cho Yong-byoung.
The move also reflects the growing involvement of financial groups in financing ventures, which is expected to grow further this year when the authorities ease strict investment restrictions. Last year, in a meeting with Prime Minister Lee Nak-yeon, heads of financial groups asked the government to lift investment restrictions imposed on conventional financial companies.
Shinhan Financial will officially announce the plan once the Financial Services Commission allow lenders to directly invest in fintech firms as early as this month, sources said.
In addition to Shinhan, Woori Financial and NH NongHyup are also expected to launch similar units within this year. KB Financial currently has 1 trillion won of assets under management via VC unit KB Investment. Hana Financial Group set up Hana Ventures, a corporate VC unit, in December last year.
According to latest data from the Ministry of SMEs and Startups and Korea Venture Capital Association, the country’s venture investments hit a record high of 1.89 trillion won in the first half of 2019, jumping 16.3 percent on-year.
By Park Ga-young (firstname.lastname@example.org)