Introduction of Korean-style BDCs Signals Restructuring of Venture Capital Market

In Korea's capital market, which invests in and helps grow companies with new technologies or ideas, discussions on the introduction of 'Korean-style Business Development Companies (BDCs)' specializing in mergers and acquisitions (M&A) are gaining momentum. BDCs will support the fundraising of venture and SMEs facing complex or demanding requirements, while also offering new investment opportunities to existing investors. This will contribute to companies with high growth potential securing necessary funds in a timely manner and investors building diversified portfolios.

BDCs are expected to act as the 'catfish of the capital market' within Korea's 100 trillion won venture capital market, fostering innovation and growth. The introduction of BDCs will expand investment opportunities for individual investors, broadening the investment base as venture investments, previously concentrated among institutional investors or high-net-worth individuals, become accessible to the general public.

Furthermore, BDCs will serve as a catalyst for the value-up of the KOSDAQ market. As BDCs invest in promising venture companies and these companies grow to list on the KOSDAQ, it will positively impact the overall qualitative improvement and enterprise value enhancement of the market.

Mirae Asset Venture Investment anticipated benefits for related industries by introducing BDCs to the National Growth Fund. Shinhan Investment Corp. has shown its commitment to nurturing venture capital by publishing a guide for Korean-style BDCs. Voices have emerged from securities firms calling for leadership in reshaping the domestic capital market through the introduction of BDCs and institutional-only private equity funds (IMAs) and related deregulation. These moves have contributed to the advancement of Korea's venture capital market and the securing of growth engines.