Busan is good

Busan Metropolitan City Completes Formation of Busan Future Industry Transition Fund II, Accelerating Expansion of the Regional Investment Ecosystem

내용

Busan Metropolitan City, led by Mayor Chun Jae-soo, announced that it has formed the KRW 55.1 billion master fund for Busan Future Industry Transition Fund II to support the growth of high-value-added companies and facilitate the transformation of the regional industrial structure. The city will continue expanding policy financing to establish a regional investment ecosystem centered on future industries.

The fund consists of KRW 50 billion from the Banking Sector Fund Dedicated to Mid-Sized Enterprises, financed by five major commercial banks, KRW 4.1 billion from Busan Metropolitan City, and KRW 1 billion from the Korea Development Bank, for a total master fund size of KRW 55.1 billion. By matching this capital with private-sector funding, the city plans to establish sub-funds totaling at least KRW 250 billion.

This initiative is significant in that it will continuously expand the regional investment ecosystem centered on future industries and establish a full-scale policy financing framework to support industrial restructuring.

In particular, the Busan Future Industry Transition Fund will serve as a key policy instrument for responding to changes in the industrial environment, including the green transition, artificial intelligence transformation, or AX, and digital transformation, or DX. It will provide local companies with timely growth capital needed for technological innovation and business transformation while addressing gaps in investment.

Busan Future Industry Transition Fund II will incorporate feedback from the field and expand support for innovative companies to maximize the impact of investment.

The scope of eligible investment targets has been expanded beyond companies meeting certain sales thresholds to include companies with strong research and development capabilities and high growth potential. This will allow regional innovative companies to receive timely financing suited to their stage of growth.

The city also plans to provide a stable supply of large-scale policy financing to support the transition and advancement of small and mid-sized enterprises in emerging industries across Busan, Ulsan, and Gyeongsangnam-do. This is expected to strengthen the competitiveness of the regional industrial ecosystem and expand synergies among industries.

Busan Metropolitan City will conduct a public solicitation for sub-fund managers in July and August. Beginning in September, it will proceed in earnest with the selection of fund managers and the formation of sub-funds, followed by the identification of local companies and the execution of investments.

Korea Growth Investment Corporation will manage the master fund and oversee the overall formation and management of the sub-funds.

The fund manager will allocate and operate the master fund’s capital across four sub-funds to expand the overall fund size. Beyond simply providing capital, the manager will actively support corporate value enhancement and the creation of successful industry cases through post-investment management and advisory services for portfolio companies.

The city will also develop incentive measures to encourage active participation by regionally based fund managers and promote the expansion of leading fund managers from the Seoul metropolitan area into the region, thereby supporting the successful formation of the sub-funds.

Through Busan Future Industry Transition Fund II, Busan Metropolitan City expects to secure new drivers of regional economic growth by promoting technological innovation and commercialization among local companies and stimulating private investment.

The development of regional innovative companies in future industries is expected to create high-quality jobs, encourage young talent to settle in the region, strengthen corporate competitiveness, and contribute significantly to improving the fundamentals of the regional industrial structure.

In particular, following the recent first investment in DR Axion Co., Ltd., a local company, the city plans to continue expanding the identification of and investment in regional innovative companies.

Busan Metropolitan City will also continue establishing the Busan Future Industry Transition Fund to create an investment ecosystem in which local companies can receive investment support at each stage of growth and to develop Busan into a business-friendly city.

Mayor Chun Jae-soo said, “Busan Future Industry Transition Fund II marks an important starting point for building a sustainable regional investment ecosystem that will enhance the future competitiveness of local industries. We will continue to make bold investments in local companies with strong growth potential and do our utmost to help Busan emerge as a new growth engine for the Republic of Korea.”