FSC chief defends 5-year term for public growth fund, pledges clearer explanation

FSC Chairman Lee Eok-won defended the five-year maturity structure of the public participation-type National Growth Fund on Wednesday, saying that even a five-year term is "an enormous hurdle" when selling the product on the market and that investors are reluctant to commit even that long. "So five years is the maximum we can do," he said.

Lee made the remarks at a plenary session of the National Assembly's Financial Affairs Committee on Wednesday. "Venture capital needs to be held for a very long time. The National Growth Fund goes up to 15 years," he said, explaining why the public participation portion was designed with a five-year term.

Democratic Party of Korea lawmaker Son Myeong-su said, "In the case of the My Korea Fund, there were significant short-term losses but large gains over the long term. The public needs to be told that accurately," and asked for a thorough explanation of the five-year closed-end structure of the public participation National Growth Fund.

In response, Lee said private venture capital is reluctant to flow into advanced industries because uncertainty is too high, and that the government's role is to act as seed money to draw in private investment alongside it. "The intent is to create a mechanism by which the public can directly receive what would otherwise only reach them indirectly — the fruits of a well-functioning economy," he said.

He added that the fund would be operated and reviewed, and that since there are plans to continue it next year, he would "make every effort to find ways to incorporate the spirit of what you have said and to explain it well."