[Reporter’s Notebook] South Korea’s Fund of Funds should prioritize growing promising startups over recovering capital

South Korea’s Fund of Funds, a major backer of small and midsize domestic venture capital firms, is sharply expanding its commitments to secondary funds.

It plans to contribute 120 billion won this year, targeting the creation of secondary funds worth up to 200 billion won. The contribution is four times last year’s amount, and the fund committed 90 billion won in its first regular allocation round alone.

Secondary funds acquire stakes in specific companies from existing investors, with the expectation that the companies’ value will rise in the future. The article argues that the Fund of Funds should focus less on recovering its contributions and more on helping promising ventures grow.