Next week’s fund recruitment announcement plan… 20% loss paid by the government
[이미지출처=연합뉴스]
[아시아경제 장세희 기자]While the government announced plans to launch a policy-type New Deal Fund with a scale of 4 trillion won in March next year, it decided to incur losses up to 20% of the finances in order to expand participation of the public.
According to the government on the 25th, the government will establish a policy-type New Deal Fund worth 20 trillion won through investments from the government and policy financial institutions by 2025, and create a New Deal Infrastructure Fund and a Private New Deal Fund.
The government plans to establish a parent fund that serves as a pick for private investment through investments in the Korea Development Bank and Growth Ladder Fund, and decides on a private fund by matching private funds including the general public.
Some of the private investment funds aim to raise about 140 billion won next year by creating an indirect public offering fund for private equity that the general public can participate in. In addition, in order to provide stable investment opportunities to the public, the ratio of subordinated investment in the finances has been decided to be increased to a maximum of 20%. This means that even if there is a loss, the government will cover up to 20%.
The rate of return based on performance fees has been lowered from 7% to a maximum of 4% to provide incentives and extend the fund management period up to 20 years.
In order to induce active participation of private capital, long-term investment is allowed, incentives are provided, and investment risk mitigation and support structures are also proposed.
First of all, the fund management period is allowed up to 10 years, but considering the investment field and investment strategy, the field that requires long-term investment can be set up to 20 years (infrastructure fund). However, even if the fund management period is extended to 20 years, the total management fee will not increase significantly compared to the 10-year fund.
In the case of distributing fund profits and losses, private investors are given optional incentives. For some of the losses, first compensate for the loss, or distribute a part of the excess profit attributable to the policy funds to private investors in the event of excess return on the fund, and a part of the policy contribution within the five-year investment period at a pre-set exercise price to private investors. It is a plan to grant the right to purchase.
Meanwhile, the government publishes an announcement for recruitment of in-house funds and receives proposals from managers by the end of January next year. Afterwards, it plans to review and select managers in February and start fund creation in March.
Reporter Jang Se-hee [email protected]