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Private equity

AIIB commits $60 mn to STIC Asia Infra Innovation Fund

It's the first time for the China-led multilateral bank to invest in a Korean GP's fund, this one focuses on digital infrastructure in emerging Asia

Nov 12, 2021 (Gmt+09:00)

Asian Infrastructure Investment Bank in Bejing, China
Asian Infrastructure Investment Bank in Bejing, China

The Asian Infrastructure Investment Bank (AIIB) has committed $60 million to the STIC Asia Infrastructure Innovation Fund managed by South Korea’s leading private equity firm STIC Investments Inc. 

The fund will focus on small and medium-sized companies across digital infrastructure and green energy infrastructure sectors in South Asia, Southeast Asia and Korea, AIIB stated.  

The Beijing-based multilateral development bank said 41% of small- or mid-cap companies in emerging markets have unmet financing needs, and this funding gap is around $5 trillion, which is notably 1.3 times the current level of available financing. The bank also stated nearly 53% of the 4.3 billion population of the Asia-Pacific are "offline" and lack access to digital infrastructure. “The objective of the commitment from AIIB is to foster technology-enabled infrastructure innovation in developing Asian economies by mobilizing private capital,” the bank added.

STIC Asia Infrastructure Innovation Fund is the parallel fund of the STIC Global Innovation Growth Fund, the Korean asset manager’s main pan-Asian fund predominantly investing in Korea's digital infrastructure. The main fund held its first closing in May 2021 with a total 415 billion won ($352 million) commitment from 16 Korean limited partners (LPs). At the time, STIC said the LP list includes Korea Development Bank, Korea Growth Investment Corporation, The Export-Import Bank of Korea, Industrial Bank of Korea, Industrial Accident Compensation Insurance Fund and Construction Workers Mutual Aid Association.

An official from STIC Investment told The Korea Economic Daily that the parallel and main funds, of which the combined target was initially 500 billion won, have received a total commitment of around 550 billion won. He added that the two funds will hold the final closing by the end of November.

While AIIB was the only non-Korean institutional investor to the two funds, STIC plans to attract more overseas LPs to their funds and increase its presence in the global fund management sector next year, he added.  

Founded in 1999 as a venture capital firm in Seoul, STIC Investments' assets under management now reach $4.5 billion. The company has invested in more than 80 companies in various sectors such as industrial and business services, information and communications technology, bio and healthcare, consumer technology and entertainment. In October, its alternative investments arm STIC Alternative Co. said it has raised $25 million to invest in a special purpose company of The Carlyle Group, which owns 50% of an oil export terminal in Texas.

Established in 2016, AIIB is capitalized at $100 billion with 104 members worldwide. Korea is the fifth-top investor in the bank with a total subscription of $3.7 billion (3.9%), following China ($29.8 billion), India ($8.4 billion), Russia ($6.5 billion) and Germany ($4.5 billion) as of October 2021, according to the bank website.

By Jihyun Kim

snowy@hankyung.com
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