KDB Capital and Aves Partners are near the closure of their joint blind-pool fund that will raise 100 billion won ($84 million), industry sources said on August 6.
The fund already secured 40 billion won from the state-run Korea Fund of Funds, with the remainder being raised in the private sector. The two firms began marketing the fund this spring and are said to have reached about 80% of the target size.
“The Covid-19 pandemic caused a bit of a delay in fundraising but the fund is well on track to be ready for investment by the end of the third quarter,” a source said.
Expanding their presence in the private equity space likely led to the partnership, industry watchers said. The new fund will be the first blind-pool fund raised by Aves Partners, which was founded in 2018. In January, KDB Capital created a team dedicated to private equity fundraising and investment to increase its private equity activity.
The partnership was first proposed by Aves Partners, which was looking for a partner to jointly launch a blind-pool fund due to its lack of track record, according to sources. KDB Capital reportedly liked Aves Partners’ deal sourcing and execution capabilities.
Aves Partners has completed two buyout deals since its inception. The firm acquired 100% of kitchen equipment manufacturer Hanil Oneex Co Ltd in 2018. The following year it bought all shares of industrial robot manufacturer I-Robo Co Ltd from existing shareholders in partnership with the private equity arm of Shinyoung Securities.
“Co-managing the blind-pool fund could also be a test for KDB Capital,” said another source, as many industry insiders are skeptical about whether the firm’s recent creation of a new team is enough to transform KDB Capital into a major player in the private equity industry.
“Industry watchers will likely pay attention not only to the performance of the fund’s investments but to further changes in KDB Capital’s investment decision-making process and a reward system for its investment professionals,” the source said. (Reporting by Byung-yoon Kim)