The Korea Development Bank's Southeastern Investment Finance Center is nearing the final stages of selecting a general partner (GP) for the 2026 Southern Region Growth Support Fund, drawing significant attention from the venture capital (VC) industry. The private equity (PE) sector has narrowed down to four contenders, while VC firms are engaged in intense competition to raise a total of 105 billion won.
According to investment banking sources, the Korea Development Bank completed document reviews on July 9 and has finalized the shortlist of VC candidates for the final presentation. The six firms are Daedeok Venture Partners, Reinvestment, MW&Company, Wonik Investment Partners, E&Investment, and Coolidge Corner Investment. Only three of these firms will be selected after the final evaluation.
This initiative is the second year of the Southern Region Growth Support Fund project, which aims to raise 100 billion won annually. The project seeks to establish a large fund totaling 345 billion won, with 240 billion won from PE and 105 billion won from VC. The VC fund will focus on investing in small and venture businesses in the southern region, playing a crucial role in strengthening the local venture ecosystem and enhancing new growth engines.
Judges for the National Growth Fund are prioritizing the operational capabilities of GPs that drive actual growth in portfolio companies over mere historical quantitative returns. It is likely that value enhancement will also be a key evaluation criterion for the Southern Region fund, similar to the National Growth Fund.
The shortlisted candidates are fiercely competing, each highlighting their unique strengths. Daedeok Venture Partners, with a solid foundation in the Daedeok Research and Development Special Zone, and Reinvestment, which has successfully managed funds in the Busan and Gyeongnam regions, emphasize their close ties to the local ecosystem. In contrast, larger firms like Wonik Investment Partners leverage their extensive business infrastructure as a strength. Meanwhile, Coolidge Corner Investment and MW&Company, known for their early-stage strengths, focus on their capabilities in nurturing startups and connecting with the TIPS program.
E&Investment is currently seen as the frontrunner. The firm has demonstrated significant capabilities in enhancing corporate value and fund formation. E&Investment's proposal for the 'E&K Defense Technology Innovation Fund' has already secured nearly 80% of its minimum target of 40 billion won (with a goal of 50 billion won). If selected for the Southern Region fund, it will quickly surpass the minimum formation criteria, enabling rapid fund establishment and swift investment execution. Notably, CEO Park Je-woo has proven exceptional return rates in advanced and deep tech sectors over the past three years, with LS Materials achieving an IRR of 2573% and Link Solutions an IRR of 64.4%.
An investment banking source stated, "In a landscape where local VCs and large firms have distinct characteristics, those that secure clear matching funds and demonstrate value enhancement capabilities are likely to be the final choices."
* This article has been translated by AI.
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