South Korea plans to launch a 20 trillion won (about $13.9 billion) sovereign wealth fund next year to support long-term investment in strategic domestic industries. The government says the fund will be used to finance areas such as artificial intelligence, chips, robotics, defense and biotechnology, and it will also invest in assets and infrastructure tied to these sectors.
Officials say the fund will be housed within the Korea Investment Corp. (KIC) and is announced during a meeting of economic affairs ministers chaired by Finance Minister Koo Yun-cheol. The proposed capitalization includes roughly 16 trillion won funded through the government’s shareholdings in state-run financial institutions, including the Korea Development Bank, the Export-Import Bank of Korea and the Industrial Bank of Korea. A further about 4 trillion won would come from shares received in lieu of inheritance and gift taxes, with potential additional sources cited such as surplus tax revenue related to the semiconductor industry and private donations.
The fund is intended to function as “ultralong-term patient” capital with no set maturity or liquidation date, and it will make direct equity investments, including domestic-focused bets after recent volatility in technology stocks.
