Busan Bank to invest W10b in LP Growth Fund for defense supply chain ventures

Busan Bank announced Thursday it will invest 10 billion won ($7.07 million) in the LP Growth Fund, a vehicle designed to foster venture companies in the defense supply chain sector in southeastern Korea. The fund is a joint initiative backed by Busan Bank, the Export-Import Bank of Korea and BNK Kyongnam Bank as co-investors.

The fund is a policy fund established alongside the Korea Fund of Funds to support defense supply chain venture companies, with the Ministry of SMEs and Startups and Korea Venture Investment overseeing its operation. The total fundraising target is 112.5 billion won.

The fund will primarily target venture companies in the defense supply chain sector based in southeastern Korea. Investments will span a broad range of firms — from manufacturers of finished defense products and component materials to companies developing advanced technologies used in national defense, including drones, robots and AI, as well as businesses producing key supply chain items.

Earlier this year, Busan Bank signed an MOU with the Export-Import Bank of Korea and BNK Kyongnam Bank in April to promote productive finance tailored to regional industries and build a cooperative framework for small and medium-sized enterprise financial support. The current investment follows as a subsequent project under that agreement, with Busan Bank and BNK Kyongnam Bank contributing their understanding of local industries and the Export-Import Bank lending its expertise in global market expansion to jointly manage the venture fund.

"The defense supply chain industry holds significant importance as a strategic industry for southeastern Korea and a key national project," a Busan Bank official said. "Through this LP Growth Fund investment, we will expand financial support for local venture companies and continue practicing finance that grows alongside regional industries through productive finance."