The Export-Import Bank of Korea (KEXIM) has started drawing up its investment plan for 2021, after it resumed private equity (PE) blind-pool funds allocations last year.
KEXIM is discussing its PE investment plan with the Ministry of Economy and Finance, including the size and timing of investments and industries on which it should focus, industry sources said.
The bank is expected to start the process in the first quarter, after Korea Development Bank (KDB) and Korea Growth Investment Corp (K-Growth) have given mandates for the New Deal fund, expected by the end of this month.
“KEXIM seems to believe that PE firms’ interest in the investments may weaken if it is too late,” said an industry source, adding, “The bank is expected to start its process as soon as managers for the New Deal fund are selected.
“KEXIM is keen to select managers with a strong capability. It is drawing up a plan which could encourage as many general partners with strong track records as possible.”
Investments are highly likely to be directed to areas related to materials, parts and equipment, restructuring and the Fourth Industrial Revolution, in line with the South Korean government’s efforts to grow companies from these sectors.
“Considering the KEXIM was established to provide finances for import and export, overseas investment and overseas resource development, its investment will have to be in line with the government’s stance,” said another industry source. “Its investment is expected to follow the path of the core business plan it suggested for this year.”
Last month, KEXIM announced three key business plans, with key elements including a strategy for South Korea’s exports to breach the $600 billion mark again, active digital innovation, and the spread of ESG (environment, social, and governance) value.
“KEXIM’s investment was concentrated in some industries last year, but its investment scope is expected to broaden this year,” said the source.
The bank invested in the K-BIO New Growth Fund and Global BioHealth-K Fund last year, and invested in a blind-pool fund in 2018. (Reporting by Byung-yoon Kim)