Keystone Partners, a private equity fund operator, surrendered its venture capital company license on July 6, according to industry sources. The firm registered the license with the Ministry of SMEs and Startups in early 2023 and operated for approximately 3 years and 6 months before canceling the registration. The decision reflects a strategic shift to concentrate resources on private equity operations, as maintaining a separate VC division required substantial resources for deal sourcing and post-investment management across numerous small-scale transactions.
Keystone Partners Obtained VC License in Early 2023
Keystone Partners, which had focused on buyout investments, obtained the venture capital company license in early 2023 with the intention to build a diverse track record by pursuing both early-stage and growth investments alongside its core PE activities. The venture division was led by Representative Jo Seong-min, who previously held positions at SBI Investment, Hana Securities IB, GE Capital, Hana Bank, and KB Securities (formerly Hyundai Securities) IB division.
Resource Concentration and Market Conditions Drive License Surrender
The surrender of the VC license is interpreted as a move to minimize fund management resources. Compared to PEF investments, VC operations require handling numerous smaller deals, creating significant resource burdens in deal sourcing and post-investment management. For Keystone Partners, concentrating resources on PE operations was deemed more advantageous than maintaining a separate VC organization.
The recent contraction in the VC fundraising market contributed to the license surrender. Venture investment market liquidity has sharply decreased in recent years, intensifying competition for policy funds (anchor LPs) in VC investment programs. Traditional VC firms face fundraising difficulties, making LP acquisition for new venture funds particularly challenging for PE-based venture divisions.
Keystone Technology Investment Fund No. 1 Reached Maturity
Keystone Partners formed the 1.4 billion won 'Keystone Technology Investment Fund No. 1' in December 2023, following its venture capital company registration. The firm surrendered its venture capital company status last month, coinciding with the fund's maturity.
FAQ
Why did Keystone Partners surrender its venture capital license?
Keystone Partners surrendered the license to concentrate resources on private equity operations. Maintaining a VC division required substantial resources for managing numerous small-scale deals in deal sourcing and post-investment management, while the recent VC fundraising market contraction made LP acquisition increasingly difficult.
When did Keystone Partners obtain and surrender the VC license?
Keystone Partners obtained the venture capital company license from the Ministry of SMEs and Startups in early 2023 and surrendered it on July 6, after operating for approximately 3 years and 6 months.
What venture fund did Keystone Partners operate?
Keystone Partners formed the 1.4 billion won 'Keystone Technology Investment Fund No. 1' in December 2023. The fund reached maturity last month, coinciding with the firm's surrender of its venture capital company status.
