Financial Services Commission Chair Lee Eok-won has made official the launch of a second tranche of the public-participation National Growth Fund, which was ‘sold out’ five days after release. The second product is expected to be launched as early as August.

In a video released on the 30th featuring his appearance on the YouTube channel ‘SamproTV’, Chair Lee said, “This is the first time I am saying this, but we will prepare and launch a second tranche of the National Growth Fund.” On the timing and size, he added, “We will consider it further and provide additional specifics.”

The National Growth Fund was spearheaded by the Lee Jae Myung administration to foster advanced strategic industries. The funds raised are invested in promising unlisted companies and KOSDAQ-listed firms in those industries. In the event of losses, the government budget covers up to 20% first, and income tax deductions of up to 40% (capped at 18 million won) are provided, boosting its popularity.

Launched on the 22nd, 87% of the total 600 billion won allocation was taken on the first day, and the entire amount was sold out on the 29th, the fifth business day after launch.

Chair Lee personally subscribed to the National Growth Fund on the first day of its launch. He said, “The director in charge wrote on the internal anonymous board, ‘It would be good if Financial Services Commission staff could step back a bit so that, if things go well, the public can seize the opportunity,’ but as someone who helped create it, and from a sense of responsibility, I judged it better to subscribe.” He added, “If I had been even a little later, I might not have been able to subscribe either.”

Many in the financial industry expect the additional National Growth Fund offering to come between August and October. That is because the process of selecting sub-fund managers to handle investment and operations alone takes two to three months. The Financial Services Commission plans to move up the launch timeline as much as possible so that the income deduction can be reflected in the year-end tax settlement for next year.

The first tranche received 120 billion won in government funding, and securing the budget for the second tranche is also a task. As drawing up a supplementary budget would take time, the Financial Services Commission is said to be consulting with fiscal authorities on using the National Growth Fund-related budget already secured.

The second tranche is widely expected to be around 600 billion won, similar to the first. Given the strong demand in the first round, the size could be larger.