South Korea is taking decisive steps to safeguard one among its most crucial enterprise financing instruments: the Nationwide Fund of Funds (Mom Fund). As policymakers transfer to increase its lifespan past 2035, the implications attain far past home startups. This debate underscores Korea’s intent to anchor long-term capital, strengthen deep-tech resilience, and place itself as a steady entry hub for international innovation.
Korea Strikes to Lengthen Nationwide Fund of Funds (Mom Fund)’s Lifespan
The Korea’s Nationwide Fund of Funds (Mom Fund) is transferring towards changing into a everlasting cornerstone of the nation’s enterprise capital market. The fund, launched in 2005, is legally set to run out in 2035.
On September 23, Rep. Jung Jin-wook of the Democratic Social gathering of Korea launched an modification to the Enterprise Funding Promotion Act that may take away the expiration clause and permit extensions in 10-year increments. The modification for this Nationwide Fund of Funds is now topic to approval by the overall meeting of fund members.
The initiative displays a rising bipartisan consensus that the Mom Fund stays important for sustaining enterprise funding and should proceed past its authentic 30-year time period.
Why the Fund of Funds (Mom Fund) Issues
The Fund of Funds (Mom Fund) is a government-backed automobile that invests not directly by anchoring enterprise funds.
Over the previous twenty years, it has drawn in pension funds and different institutional traders, expanded capital entry outdoors Seoul, and supplied crucial help to early-stage and smaller enterprise capital companies. As of the second quarter of 2025, the fund’s cumulative dimension had reached KRW 10.9 trillion (~ USD 7.8 billion).
In 2024 alone, it dedicated KRW 1.35 trillion, a 37.8% enhance year-on-year. In distinction, private-sector contributions declined 25%, underscoring the fund’s persevering with function as affected person capital. Its share of whole enterprise fund commitments stood at 12.8%.
Mom Fund: A Essential Catalyst for Korea’s Enterprise Capital
Rep. Jung Jin-wook defined the motivation behind the invoice:
“With non-public traders nonetheless missing variety and adequate scale, ending the Mom Fund prematurely might weaken the muse of the enterprise ecosystem. The fund stays a vital catalyst for enterprise capital in Korea.”
Lee Dae-hee, the newly appointed CEO of Korea Enterprise Funding Corp. (KVIC), additionally pledged to prioritize the everlasting continuation of the fund, describing it as the highest coverage activity beneath his tenure.
A KVIC official added:
“The Mom Fund has underpinned the expansion of Korean startups and created the bottom for personal capital growth. We’ll guarantee steady operations according to authorities coverage and parliamentary choices.”
Extending Korea’s Nationwide Fund of Funds: A Stronger Pathway for International Innovators
Korea’s plan to increase the Nationwide Fund of Funds (Mom Fund) alerts a dedication to affected person capital in deep-tech and different long-horizon sectors the place funding requires resilience and scale. Policymakers warn that ending the fund prematurely might weaken investor confidence and sluggish innovation.
The initiative can be central to President Lee Jae-myung’s agenda. The federal government has pledged to double Mom Fund contributions, focusing on a KRW 40 trillion (USD 28.6 billion) enterprise market by 2030. The 2026 allocation is already set at KRW 2 trillion, twice the present yr’s dedication.
International founders, traders, and policymakers acquire clearer alerts from this transfer. Korea is reinforcing its enterprise infrastructure to stay a aggressive entry level into Asia-Pacific innovation. By securing permanence, the Mom Fund is predicted to stabilize enterprise flows, broaden cross-border co-investment, and open stronger pathways for entrepreneurs utilizing Korea as a launchpad.
The Street Forward for Korea’s Enterprise Capital Panorama
If handed, the modification would completely take away uncertainty across the fund’s 2035 expiration. By securing a predictable capital anchor, Korea strengthens its capability to nurture high-growth sectors and broaden its function as a enterprise hub in Asia.
International founders viewing Korea as a possible entry level will even see a transparent sign that the ecosystem is investing not solely in direct funding but in addition within the infrastructure required to maintain affected person, long-term capital. Buyers and policymakers worldwide can then learn this as a case examine in how state-backed funds evolve into stabilizers of enterprise markets during times of volatility.
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