Busan launches second future industry transition fund

Busan said Monday it has established the mother fund for the "Busan Future Industry Transition Fund 2," aimed at supporting the growth of high-value-added companies and restructuring the region's industrial base around future industries.

The mother fund totals 55.1 billion won ($37.6 million), comprising a 50 billion won bank-sector fund dedicated to mid-sized companies — contributed by five major commercial banks — along with 4.1 billion won from the city and 1 billion won from Korea Development Bank. The city plans to match the fund with private capital to establish sub-funds worth more than 250 billion won in total.

The fund will supply growth capital to help local companies innovate and pivot their businesses in response to shifts in the industrial environment, covering eco-friendly industries, AI transformation and digital transformation. The investment scope has been broadened beyond revenue size to include companies with strong R&D capabilities and high growth potential, ensuring that regional innovators can access funding suited to each stage of their development.

The city will channel policy funds for new-industry transition and upgrading to small and mid-sized companies in Busan, Ulsan and South Gyeongsang Province. It plans to open a public call for sub-fund managers in July and August, with manager selection and sub-fund formation set to begin in September, when the search for investee companies and capital deployment will also get under way.

Korea Growth Finance Investment Management will oversee the mother fund, handling sub-fund formation and management. The manager will allocate the mother fund's capital across four sub-funds and provide post-investment management and advisory services to help raise the value of portfolio companies. The sub-fund call will encourage Busan-based fund managers to participate, and incentives will be put in place to attract top fund managers from the Greater Seoul area to expand into Busan.

"Through the Busan Future Industry Transition Fund 2, we will secure new growth engines for the local economy," a city official said, expressing hope that the fund would also help create quality jobs in future industries, encourage young talent to settle in the region, strengthen corporate competitiveness and improve the structural health of local industries.

Busan has begun its first investment through the fund — in local company DR Axion — and plans to expand its search for and investment in regional innovators going forward. The city also intends to build an investment ecosystem through the Busan Future Industry Transition Fund that supports local companies at every stage of growth, with the broader goal of developing Busan into a business-friendly city.