FEATURES
Korean film fund closes, backers exit as book value collapses; cinema merger adds pressure to Korean movie sector
02 June 2025
Shinhan Bank-Daesung Cultural Contents Investment Fund, previously a South Korean movie fund with KRW7 billion/US$5 million of starting capital, has been closed by its two principal backers – Shinhan Bank and Daesung Private Equity.
The move, while not large, underlines the exit of capital and other mounting difficulties for Korea’s feature film industry.
The fund, which had notably backed hit "Hansan: Rising Dragon" and expensive two-part flop "Alienoid", had seen its book value collapse to KRW500 million/US$364,000, making it uneconomic to operate.
The film industry’s pre-COVID growth had attracted hedge funds, bank finance and venture capital firms to invest in film production alongside Korean studios and production firms.
Oscar-winning "Parasite" (2019) was able to count on institutional investors including Korea Post, KDB Capital, IBK Capital and Hana Financial Investment as well as hedge funds including Q Capital Partners and Company K Partners, Ryukyung PSG Asset Management.
The latter had the specificity of only investing in films involving CJ ENM, the Korean theatrical distributor and world sales agent of "Parasite", thus providing a risk-sharing function for the content giant.
The past five years of box office weakness – Korea’s annual theatrical revenue last year was KRW1.19 trillion/US$866 million, some 38% lower than in 2019 – has caused a flight of capital to less risky and better-performing asset classes. In the entertainment sector these have included music and webtoons.
Further evidence of the Korean film sector’s declining economics also emerged in May with the proposed merger of the country’s second and third largest cinema chains.
Lotte Cinema, with 915 cinema screens, is backed by the Lotte retail and hotels group. Megabox, with 767 screens, is controlled by JoongAng Group, whose media assets stretch from newspapers to a 25% interest in JTBC TV broadcaster and producer.
The deal, which would move the Korean film exhibition from oligopoly to duopoly, is subje...
Shinhan Bank-Daesung Cultural Contents Investment Fund, previously a South Korean movie fund with KRW7 billion/US$5 million of starting capital, has been closed by its two principal backers – Shinhan Bank and Daesung Private Equity.
The move, while not large, underlines the exit of capital and other mounting difficulties for Korea’s feature film industry.
The fund, which had notably backed hit "Hansan: Rising Dragon" and expensive two-part flop "Alienoid", had seen its book value collapse to KRW500 million/US$364,000, making it uneconomic to operate.
The film industry’s pre-COVID growth had attracted hedge funds, bank finance and venture capital firms to invest in film production alongside Korean studios and production firms.
Oscar-winning "Parasite" (2019) was able to count on institutional investors including Korea Post, KDB Capital, IBK Capital and Hana Financial Investment as well as hedge funds including Q Capital Partners and Company K Partners, Ryukyung PSG Asset Management.
The latter had the specificity of only investing in films involving CJ ENM, the Korean theatrical distributor and world sales agent of "Parasite", thus providing a risk-sharing function for the content giant.
The past five years of box office weakness – Korea’s annual theatrical revenue last year was KRW1.19 trillion/US$866 million, some 38% lower than in 2019 – has caused a flight of capital to less risky and better-performing asset classes. In the entertainment sector these have included music and webtoons.
Further evidence of the Korean film sector’s declining economics also emerged in May with the proposed merger of the country’s second and third largest cinema chains.
Lotte Cinema, with 915 cinema screens, is backed by the Lotte retail and hotels group. Megabox, with 767 screens, is controlled by JoongAng Group, whose media assets stretch from newspapers to a 25% interest in JTBC TV broadcaster and producer.
The deal, which would move the Korean film exhibition from oligopoly to duopoly, is subject to regulatory approval.
Trade bodies have previously lobbied against the CJ CGV, Lotte, Megabox triumvirate, arguing that they hold pricing and market-dominating power and have favoured films from their own affiliate distribution companies. Regulators have imposed fines for abuse.
But now, with cinema operators losing money, the industry may have little choice but to accept a landscape that is still narrower.
The Yonhap news agency has reported that film distribution operations Lotte Entertainment and JoongAng’s PlusM Entertainment are also looking at possible integration. - By Patrick Frater
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