Crescendo Equity Partners is preparing to raise its third fund after being selected as one of 26 managers for New Deal investment mandates from Korea Development Bank (KDB) and Korea Growth Investment Corp (K-Growth).
The Seoul-based firm, which is backed by PayPal founder and venture capitalist Peter Thiel, wants to raise 500 billion won ($440.5 million) for the new fund, according to industry sources.
Crescendo and two other private equity firms have secured a combined 270 billion won of capital commitments from KDB and K-Growth.
Founded in 2012, Crescendo specializes in investing in relatively small companies with high growth prospects. It focuses on increasing the value of portfolio companies by helping them expand their reach to overseas markets. The firm manages one fund at a time for strategic reasons.
Its first fund, which was closed at 74 billion won in 2012, has so far delivered an internal rate of return (IRR) of more than 25%. Investments mostly consist of high technology manufacturers, including Hanmi Semiconductor, electronic parts supplier Sangshin Electronics and telecommunications equipment supplier Seojin System.
Crescendo invested 37 billion won in Hanmi Semiconductor in 2013 and exited its investment in the following year with a 40% return, while its 10 billion won investment in Sangshin Electronics also delivered an IRR of 60%. The firm’s 20 billion won investment in Seojin System delivered a 50% IRR after its exit in 2017 when the company went public on Kosdaq. Crescendo invested an additional 60 billion won in Seojin System in 2019 and 90 billion won earlier this year, betting on the company’s upside potential.
The second fund was closed at 450 billion won in 2018, with commitments from the National Pension Service, Korean Teachers’ Credit Union and K-Growth, and is almost fully deployed. Its investments include stakes in Hancom’s overseas software unit Thinkfree NV and pan-Asia logistics platform QXpress. (Reporting by Si-eun Park)