The "Future City Fund" will recruit its first investors in December this year to smoothly raise funds for the reconstruction of the first new cities such as Bundang, Seongnam, Gyeonggi Province, and Ilsan, Goyang City. Unions and trust companies that are pushing for the first new city reconstruction project will be able to raise up to 20 billion won in initial project costs through the fund. The Ministry of Land, Infrastructure and Transport and the Housing and Urban Guarantee Corporation (HUG) held an investment policy briefing session to create a future city fund worth a total of 12 trillion won in Yeouido, Seoul, on the 27th. "The Future City Fund will solve the difficulties of project implementers that have existed in the maintenance project," said Jin Hyun-hwan, the first vice minister of the Ministry of Land, Infrastructure and Transport. "We will provide funds at stable interest rates for the entire maintenance project, including the initial project cost, which was difficult to raise only by private financial institutions."

The Future City Fund is a "loan-type fund" that provides loans to the implementers of the reconstruction of old planned cities, including the first new city. Business expenses are loaned and the interest received is used to provide commissions and investment returns. "Considering the general HUG-guaranteed loan interest rate, the return on investors is expected to be around 4 percent," the ministry said. For the stable operation of the fund, HUG plans to guarantee all loans. Specifically, it consists of a parent fund invested by pension funds and a child fund for each reconstruction project area that directly loans project costs. In order to attract investment, parent fund investors are granted priority investment rights to their own funds. Parent and subsidiary funds are allowed to securitize their shares. Through this, investors can transfer and trust their shares in the fund to convert their investment funds into cash early.

The Future City Fund has expanded the scope of support to not only unions but also trust companies, and expanded the support limit to up to 20 billion won. Currently, the initial project cost loan for general reconstruction and redevelopment associations is possible up to 6 billion won.

In order to implement loans in time for the full-fledged need for funds in the first new city maintenance project, the company will announce a plan to select a management company within June this year. It plans to raise investment in the first parent fund worth 600 billion won in December.

[Reporter Lee Hee Soo]