Korea Investment Partners (KIP) has been selected to receive capital commitment from Korea Growth Investment Corp. (K-Growth), the state fund of funds, for its project fund.

KIP are currently raising capital to invest in secondary battery technology, with a target fundraising goal of 50 billion won. The venture capital firm plans to gather 10 billion won for its fund dedicated to investment opportunities in secondary battery companies, with the remaining 40 billion won expected to be raised for a separate vehicle in a partnership with its peer.

K-Growth will commit five billion won to the VC firm’s 10 billion won fund, which is expected to be ready to deploy capital soon.

K-Growth announced in January a plan to select external managers to allocate money earmarked for investment in the materials, parts and equipment sectors in the country. The program was divided into two categories: blind-pool funds and project funds. The state fund of funds, in a partnership with Korean Development Bank (KDB), set aside total 120 billion won for commitments to blind-pool funds, with up to 100 billion won earmarked by K-Growth to allocate to funds dedicated in the three sectors.

For allocation to blind-pool funds, two managers – a consortium of SKS Private Equity and Korea Investment Private Equity and a consortium of BNW Investment and Industrial Bank of Korea – were selected among nine applicants through an open competition in February.

Meanwhile, for project funds, K-Growth will accept proposals until its allocation of all 100 billion won is completed. Each proposal is to be considered individually.

Prior to KIP, WJ Private Equity received a commitment from K-Growth earlier this year for its 37 billion won project fund, which invested in Yulkok, the country’s largest aerospace and defense spare part supplier.

“Investors’ interest in the materials, parts and equipment sectors is growing,” an industry insider said. “More private equity and venture capital firms appear to submit proposals to K-Growth to launch a project fund investing in these sectors.” (By reporter Kim Byung-yoon)