Korea Development Bank (KDB) and Korea Growth Investment Corp (K-Growth) have finalized a list of 26 investment firms for New Deal mandates totaling about 1 trillion won ($890 million), according to a website announcement on Friday (February 26).
It ends two months of intense competition among dozens of investment firms for mandates focusing on areas related to the government’s New Deal initiative.
In the category of funds smaller than 120 billion won – where most applicants were venture capital firms – mandates worth a total of 210 billion won were awarded to eight managers, including IMM Investment, Korea Investment Partners and a consortium of Stonebridge Ventures and Industrial Bank of Korea.
This category had the strongest competition, with 37 firms submitting proposals and only 15 shortlisted to advance to the interview round.
Shinhan Venture Investment, Aju IB Investment and Company K Partners were awarded mandates totaling 175 billion won for funds larger than 120 billion won.
In the category of funds larger than 150 billion won, where 11 proposals were submitted, mandates worth 270 billion won were awarded to three private equity firms – E&F Private Equity, Q Capital Partners and Crescendo Equity Partners.
“The results for the category of funds smaller than 120 billion won were in line with what had been expected in the market,” an industry insider said. “But those for the category of funds larger than 120 billion won came as a surprise, because no private equity firm made it to the final selection.”
KDB and K-Growth will issue letters of commitment in April, and the selected managers are expected to reach their respective fundraising targets by the end of October. They are likely to be closely watching the tender processes for awarding mandates launched by other institutional investors in the coming months.
KDB and K-Growth are expected to award more New Deal mandates later this year, probably focusing on regional development or with the aim of providing opportunities to new and young investment firms, sources said. (Reporting by Byung-yoon Kim)