Private equity firm IMM Investment’s fundraising efforts for its mezzanine blind-pool fund Petra 8 Private Equity Fund is going smoothly, with its initial closing expected to occur soon.
IMM Investment is marketing to limited partners to raise capital for its eighth fund, industry sources on August 31. The target fund size is a minimum of 600 billion won ($505 million), which is more than 150 billion won larger than its predecessor fund launched in 2018.
The PE firm started raising funds for Petra 8 after it was awarded a PE mandate by the National Pension Service (NPS). IMM Investment, along with four other PE firms, was awarded a combined 800 billion-won mandate by the pension scheme, securing approximately 27% of its target fund size in one fell swoop.
The Pension Foundation of the General Assembly of the Presbyterian Church of Korea also awarded a 20 billion-won mandate to IMM Investment last month. This was the second time the pension fund picked IMM Investment as its manager, after it selected the PE firm as its venture capital manager and awarded a 10 billion-won mandate in the first half of this year.
The PE firm has reportedly raised approximately 330 billion won for Petra 8 so far, including commitments from brokerage firms and credit finance firms. The fund plans to hold its first closing once the amount of capital raised reaches 400 billion won.
IMM Investment used multi-closing tactics when it raised capital for its Petra 7 fund. It set the target size for the fund at 500 billion won and held the first close with commitments exceeding 300 billion won. IMM Investment invested the entire committed capital of its seventh fund one year after its launch.
“IMM Investment has sought some potential portfolio companies and it has seemingly decided to use multi-closing tactics to make its investments swiftly,” said an industry source.
IMM Investment is expected to continue its efforts to win mandates in the second half of this year. It submitted its proposal to be awarded a PE mandate by Yellow Umbrella, the mutual aid fund under Korea Federation of Small and Medium Business, in mid-August. IMM Investment is also expected to apply to be awarded mandates by Korea Post and Korea Scientists and Engineers Mutual-Aid Association. If the PE firm is awarded a mandate by all three limited partners, it will be able to secure committed capital of nearly 200 billion won, paving the way for the eight fund’s final closing.
Market insiders are focusing on the eighth fund’s potential portfolio companies. The Petra 8 is a blind-pool fund which targets mezzanine products such as convertible bonds and bonds with warrant.
There is the possibility that the fund may invest in assets other than mezzanine products, market watchers said. IMM Investment invested in a wide range of industries through its seventh fund, including its acquisition of a controlling stake in GS ITM, jointly with JKL Partners. It was notable as the firm has focused on growth investing rather than buyouts. (Reporting by Byung-yoon Kim)