[Edaily Marketin Reporter Song Seung-Hyeon ] The first regular investment round of the Master Fund—which was expected to prop up the venture capital market in the second half of this year with 1.8 trillion won in “ammunition”—is off to a rocky start. It has been revealed that a significant number of the selected general partners (GPs) have failed to meet the “formation within three months” requirement and have filed a wave of requests for deadline extensions. Analysts suggest that as private liquidity is being siphoned off into the National Growth Fund, the rest of the fundraising market is experiencing a freeze.

According to the venture capital (VC) industry on the 29th, a significant number of the 60 GPs selected last April through the “2026 Master Fund First Regular Investment Program” have recently applied for extensions to their fund formation deadlines. While they were originally required to complete fund formation by July—three months after selection—it has been confirmed that most have pushed the deadline back to September. There are even reports circulating that all 60 GPs have requested an extension.

Previously, the Ministry of SMEs and Startups and Korea Venture Investment had unusually mandated a “three-month formation” period this year with the intention of injecting funds into the market as soon as the second half of the year began. This was a departure from the customary practice of setting formation targets of around six months or within the same year. However, as market funding conditions have failed to keep pace with the government’s timeline, the likelihood that the actual execution of investments will be delayed has increased significantly.

A closer look at the details of the formation delays reveals an even more serious situation. One GP selected for the first regular capital contribution program reportedly applied for a postponement just before its scheduled July formation, after two limited partners (LPs) withdrew their commitments at the last minute. It is rare for LPs to pull out at such a late stage of formation. This has led to the interpretation that it is clear evidence that the investment capacity of private LPs is heavily concentrated on specific products.

GPs point to the National Growth Fund as the cause. Financial authorities have lowered the risk weight applied to the National Growth Fund’s investment portion—used in calculating risk-weighted assets (RWA)—from 400% to 100%, and have even applied a special exemption that waives penalties for losses unless there is intentional misconduct or gross negligence. Consequently, LP funds from the banking sector are being concentrated in this area. The fact that policy funds are deployed first as an anchor also serves as a safety net for private LPs.

There have been cases where LPs who had been discussing investment from the outset withdrew. Another GP had reached an agreement with an LP to participate, but failed to complete the fund formation within the deadline once the National Growth Fund began operations in earnest. The CEO of this company explained, “We haven’t received a firm commitment because the LPs are currently preparing their investments in the National Growth Fund,” adding, “We plan to secure funds from the LPs after extending the deadline.”

In fact, the pace at which National Growth Fund GPs are forming their funds contrasts sharply with that of fund-of-funds GPs. Aju IB Investment raised 200 billion won—twice its hard cap—just three days after being selected as a small-league GP in the indirect investment sector, and it has been reported that some firms met their hard caps within just a few hours of being selected. In a structure where GPs compete for the same pool of LPs, products with more favorable terms are effectively monopolizing the funds.

The problem is that this concentration of capital is unlikely to be a temporary phenomenon. With the third round of the National Growth Fund’s investment program still pending, it is expected to absorb additional liquidity from the market in the second half of the year. In contrast, funds with smaller formation sizes—such as those in the Mother Fund’s “Rookie League” or “Second-Chance League”—face a relatively heavy burden of private matching funds due to the low proportion of anchor investments. This has led to criticism that the system is paradoxical: while these firms were selected with the aim of nurturing new and re-entering management companies, another policy product is effectively cutting off their lifeline.

Another VC official stated, “Firms that were not selected for the National Growth Fund are struggling even to raise enough capital for a single small-scale fund,” adding, “The polarization in fundraising will inevitably worsen until the third round of capital injections is completed.”