Korea Growth Investment Corp (K-Growth), the country’s fund of funds operator, has started to select external asset managers for its second corporate restructuring fund.
K-Growth recently kicked off a process to select external managers to earmark a combined 501.5 billion won ($418.4 million) for investments focusing on corporate restructuring schemes.
The fund of funds operator will select three general partners for private equity funds and two general partners for private debt funds for its blind commitments.
K-Growth will receive applications for its blind-pool fund external managers by June 30. Applications for project funds will be evaluated whenever they are received.
It plans to commit 200.6 billion won to private equity funds, 100.3 billion won to private debt funds and 200.6 billion won to project funds respectively via its 501.5 billion-won flagship fund.
This year the fund of funds operator has removed all leagues for the private equity funds, allowing applying firms to decide the size of funds within a range of 50 billion to 100.6 billion won.
K-Growth has declared 2020 as the first year to create private debt funds for which applying firms are to form a fund worth 75.15 billion won each.
The second corporate restructuring fund has included large-sized companies as its main investment target. Unlike its predecessor fund, the second fund will support not only small and mid-sized companies but also large-sized companies.
Both private equity and private debt funds have to allocate more than 60 percent of total commitments to main investment targets. The latest fund also aims to support companies that are hit by the coronavirus pandemic.
This year K-Growth has decided to increase a portion of commitments to project funds. The fund of funds operator committed 141.5 billion won to project funds out of total commitments worth 541.5 billion won for its first corporate restructuring fund. For the second fund it will allocate 200 billion won to project funds out of a total 501.5 billion won.
Project funds will account for 40 percent of K-Growth’s total commitments, up from the first fund’s 26 percent.K-Growth has created a total of six blind-pool funds worth approximately one trillion won and six project funds worth about 550 billion won through its commitments to the first corporate restructuring fund between 2018 and 2019. A total of 16 companies have received 700 billion won from the fund, including Dongbu Steel and Sungdong Shipbuilding & Marine Engineering. (Reporting by Hee-yeon Han)