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(Seoul=Yonhap Infomax) Yong Bi Yang = NH Investment & Securities Co., a leading South Korean brokerage, has committed 100 billion won ($76 million) to venture and technology-focused funds, offering much-needed relief amid a severe shortage of matching capital in the venture capital (VC) sector.
Industry sources report that NH Investment & Securities has already engaged in preliminary discussions with multiple asset managers. The VC industry is welcoming the move, viewing it as a potential catalyst for increased private capital inflows from Yeouido, South Korea’s financial district.
While public funding for venture funds is expected to expand under the new administration, a lack of sufficient private matching capital has raised concerns about fundraising bottlenecks. NH Investment & Securities is being praised for accurately identifying and addressing the needs of the venture capital market with timely capital deployment.
On the 26th, NH Investment & Securities announced plans to proactively invest a total of 315 billion won ($239 million) in innovative industries and small-to-mid-sized enterprises (SMEs). The New Technology Investment Division within the Investment Banking Department is spearheading this initiative.
The investments will be executed ahead of the launch of the government’s National Growth Fund, underscoring NH Investment & Securities’ intention to play a leading role as a private financial institution.
Specifically, 100 billion won ($76 million) will be allocated to innovative industries, and 215 billion won ($163 million) to SMEs and mid-sized companies.
Of the total, 100 billion won ($76 million) will be invested in venture funds, targeting more than 20 venture and technology-specialized funds. This equates to approximately 5 billion won ($3.8 million) per VC on average.
Through these investments, NH Investment & Securities aims to provide indirect exposure to sectors such as artificial intelligence (AI), semiconductors, materials, components and equipment (so-called “SoBuJang”), robotics, mobility, and digital content.
The company plans to invest in VCs that have secured policy funding but are struggling to raise matching capital. This includes funds managed by general partners (GPs) entrusted with policy capital from sources such as the Korea Fund of Funds, Korea Growth Investment Corp., and the National Pension Service.
NH Investment & Securities will not conduct a separate fundraising program for this initiative. Instead, it will review and evaluate proposals from asset managers on a case-by-case basis. Some managers are already in advanced discussions regarding potential investments.
For NH NongHyup Financial Group, the parent company, expanding VC investments through NH Investment & Securities offers strategic advantages. As a limited partner (LP) in domestic VC funds, the group can quickly access diverse investment strategies and market trends.
NH NongHyup Financial Group has been actively seeking to strengthen the competitiveness of its in-house VC arm, NH Venture Investment. In the second half of this year, the group commissioned a consulting firm to benchmark rival financial holding company VCs, requesting insights on market entry and growth strategies.
Although such consulting is conducted every three to four years, it highlights NH NongHyup Financial Group’s ongoing focus on its VC business.
NH Investment & Securities, which had previously played a limited role in venture fund investments, is now emerging as a major player, drawing positive reactions from the VC industry.
“While public funding for venture funds is expected to increase under the new administration, private matching capital remains tight, creating significant imbalances,” said an industry official. “NH Investment & Securities’ timely move is expected to open the floodgates for further capital inflows from Yeouido-based securities firms.”
ybyang@yna.co.kr
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