Korean firms establish strategic matching fund
South Korea’s KT&G announced on Oct. 7 that it had formed New Growth Investment Partnership no. 1, a strategic matching fund, with Mirae Asset to identify and develop new business areas.
KT&G and Mirae Asset respectively invested 20 billion won ($15 million) in starting New Growth Investment Partnership no. 1.
Based on the performance of the first fund, a subsequent fund will be formed to expand the basis of developing a business for new plant species.
The fund will be managed by Mirae Asset Capital. The periods of investment and maintenance of the fund are four and 10 years, respectively.
KT&G and Mirae Asset Capital will cooperate with each other in such processes as reviewing new businesses, identifying an investment area, and executing the investment.
KT&G noted that its strategy was to find and develop the driving force of the company’s growth through the strategic matching fund with Mirae Asset.
The main areas of investment are health care, ESG, and industries of new growth, and the goal is to secure an opportunity to enter a new business field while maximizing a synergetic effect with existing businesses.
Short for Environmental, Social, and corporate Governance, ESG has been recognized as three central factors in improving the sustainability of a company or business.
ESG programs have become one of the hot-button topics for businesspeople, bureaucrats, and scholars both at home and abroad.
“We are forming a strategic alliance with Mirae Asset for investment in new-growth industries in order to secure sustainable growth in the midst of the rapidly changing business environment and to identify businesses of new plant species,” KT&G official Lee Woong-kyu said.
“KT&G will actively invest in new business fields while strengthening the capacity of existing businesses.”
Meanwhile, KT&G said that it was making efforts in various ways to obtain force for new development by investing in venture funds and building up equity in venture corporations.
KT&G so far made an equity investment in a total of 12 venture firms at a value of 27.5 billion won. The cumulative investment in venture funds reached 43 billion won.
KT&G is headed by President Baek Bok-in.