Hong Nam-ki “New Deal Fund to be created in March next year… 30% of infrastructure and 70% investment in companies”

Input 2020.12.23 10:39

On the 23rd, Hong Nam-ki, Deputy Prime Minister of Economy and Ministry of Strategy and Finance, said, “We have confirmed follow-up measures such as fund allocation and private incentive system so that fund creation can start in earnest from March next year.” ) Will be invested in companies related to the New Deal.”

Deputy Prime Minister Hong discussed the’policy-type New Deal Fund management and private participation revitalization plan’ at the ’23th Emergency Economic Central Countermeasure Headquarters Meeting and the 7th Korean New Deal Ministers’ Meeting’ held at the Seoul Government Complex. .

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Deputy Prime Minister Hong said, “The government has been steadfastly conducting preliminary work such as New Deal Investment Guidelines to create a policy-type New Deal Fund with a target of 20 trillion won by 2025 and 4 trillion won in 2021.” “We want to confirm follow-up measures in the announcement of the fund recruitment at the end of this year so that it can be started.”

Regarding the allocation of resources, Deputy Prime Minister Hong explained, “We will create a policy-type New Deal Fund through government investment and private matching, but we will invest up to 30% (10-30%) of this in New Deal Infrastructure.”

The remaining 70-90% will be invested in New Deal-related companies, but ▲ Investment Proposal Funds that invest 50% or more in 6 core industries such as DNA and ▲ Growth Funds that support corporate scale-up through M&A and R&D. He added that it was a plan.

Regarding investment incentives, “In order to induce long-term and adventure investments of private capital and prevent distraction, we will allow the fund management period to be extended up to 20 years (usually 7 to 8 years) in areas that are necessary in addition to subordinated investment in finance.” “We will provide incentives such as raising the policy investment ratio to a maximum of 45% (average 35%) and lowering the standard rate of return for payment of performance fees to a maximum of 4% (usually 7%) depending on the necessity and risk.”

In addition, he said, “The private equity indirect public offering fund in which the general public participated will be created at a scale of 140 billion won in 2021, and in this regard, we will increase the ratio of subordinated investment in the finance to a maximum of 20% (average 10%) in order to actively induce public participation.” Added.

Regarding the spread of the new coronavirus infection (Corona 19) on the same day, Deputy Prime Minister Hong said, “For both quarantine and economy, during the year-end and New Year holidays, the 2.5+α phase has been strongly implemented and all the people are united. “I earnestly request that you comply with the quarantine.”

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