Industrial banks raise 3.4 trillion KRW in policy funds… driving private investment to 13 times

Korea Development Bank’s policy funds established last year exceeded the original target, and were praised for achieving both the goal of attracting private investment and supporting industry simultaneously. The total amount raised reached 3.44 trillion KRW, with all three funds surpassing their plans.

According to the bank, by the end of last year, the Innovation Growth Fund had raised 3.14 trillion KRW, slightly exceeding the 3 trillion KRW target. The fund originally planned to raise 180 billion KRW to activate the semiconductor ecosystem, but actually raised 190 billion KRW. Funds targeting growth in the nuclear power industry also progressed smoothly, raising 1100 billion KRW against a goal of 1000 billion KRW. The three funds all achieved an average completion rate of over 100%, with the Nuclear Power Industry Growth Fund reaching the highest level at 110%.

This fund-raising can to some extent be interpreted as a result of public-private cooperation. Usually, policy funds are financed with a certain proportion of government or public institution funds, with the remaining amount supplemented by private investors or financial institutions. Under this structure, the bank has still consistently exceeded its targets year after year. Since officially starting investment operations in 2018, the total amount raised has reached 32.5 trillion KRW by 2025, based on 2.5 trillion KRW of government funding, successfully attracting up to 13 times the private capital. This demonstrates a significant “fiscal multiplier effect.”

Last year was a period of intensified concerns over liquidity tightening and a challenging environment for fund-raising. Large circulation companies like Homeplus faced liquidity crises, negatively impacting the capital market. There were widespread worries that the chain reaction could reduce private investment capacity. Nevertheless, the bank stated that by precisely analyzing investor needs and industry prospects, and by screening and attracting competitive operating companies and private investors, they ultimately achieved over-target results.

The additional fundraising period for these funds will continue until March this year. Therefore, the final total amount raised is likely to further expand beyond the current scale. It is expected that once the funds are officially operational, they will help alleviate funding shortages in related industries in the medium to long term and solidify the foundation for structural growth. Going forward, based on government policy tone and the bank’s fund implementation, it is also anticipated to have a positive impact on enhancing the competitiveness of domestic strategic industries and revitalizing the capital market.