Second National Growth Fund Opens for Applications on September 30 After First Round Sells Out Early

A second round of South Korea's National Growth Fund will open for applications on September 30 after the first 600 billion won offering sold out in one week.

The Financial Services Commission said applications would run until October 15. Investors from the first round cannot join the second. This round will reserve half its allocation for lower-income applicants, up from 20% previously. The group includes people with annual earned income of 50 million won or less or comprehensive income of 38 million won or less.

The higher allocation reflects the first round's outcome, when lower-income investors ultimately accounted for about 35% of sales. If any reserved allocation remains after the second week, it will be sold without separating applicants by income.

The public-participation fund raises money from individual investors and invests mainly in advanced strategic-industry companies. At least 30% of the fund will go to unlisted companies and technology firms eligible for special KOSDAQ listings, while KOSPI-listed companies can account for no more than 10%.

The fund has a five-year term and cannot be redeemed early. Its appeal includes 1.2 trillion won in subordinated government funding, which absorbs some principal losses, along with tax benefits such as deductions of up to 18 million won and separate taxation of dividend income at 9.9%. But investments in growth-stage companies carry significant risk, and holdings in unlisted shares or mezzanine products such as convertible bonds may be difficult to value before maturity.