SkyLake Investment fund likely to exceed its target

South Korean private equity (PE) firm SkyLake Investment expects to close its 11th blind-pool fund soon amid strong interest from market insiders, with Doosan Solus widely expected to be the vehicle’s first investment. 

SkyLake is conducting a marketing campaign for limited partners (LPs) to form the fund, an industry source said on Wednesday (July 15). The PE firm began its fundraising efforts after being selected by Korea Teachers Credit Union SkyLake to manage 100 billion won ($83 million) in the fund a year ago.

SkyLake initially set the fund’s target size at 500 billion won and it was to be closed in the first half of this year, but the target size and the closing date have both reportedly been changed. It is believed the target has already been exceeded, and the company is now expected to hold the final close for the fund in August, after raising additional funds from several LPs. 

So far this year the firm has been selected as a manager by South Korea’s Military Mutual Aid Association, Korea Growth Investment Corporation and the Korea Development Bank (KDB), Teachers’ Pension and National Pension Service (NPS).

The focus is shifting to the fund’s future investments, with copper foil maker Doosan Solus probably high on the list. SkyLake has signed a preliminary deal with Doosan Group to take over the unit and negotiations are likely to continue until the end of August. If SkyLake becomes the new owner of Doosan Solus, it will finance the acquisition through the blind-pool fund.

The likely structure of the fund is also attracting attention. SkyLake has managed its 10th blind-pool fund as a parallel fund, with the unit split into two and KDB and NPS as the respective anchor investors. Both will also invest in the 11th fund, leading to speculation that the new fund may use the same parallel structure.

Meanwhile, SkyLake is selling its Outback Steakhouse Korea unit. About four shortlisted bidders are conducting due diligence on the company and the final round of bidding is expected in August. (Reporting by Byung-yoon Kim)