Private equity (PE) firm LX Investment has almost finished fundraising for a blind-pool fund with a ESG (environment, social and governance) focus, and will start investing next month.
The firm was awarded a mandate for the government’s New Deal fund on February 26 by Korea Development Bank and Korea Growth Investment Corp, industry sources said on Tuesday (March 2). LX Investment has been raising funds to create a fund worth 120 billion won ($100 million) focused on ESG investments, along with SK Engineering & Construction and IBK Capital. The firm is expected to receive mandates worth around 30 billion won.
SK Engineering & Construction is establishing value chains as part of its strategy to become a ESG-focused company. The construction company acquired waste management firm EMC Holdings for one trillion won and plans to take over various companies through the fund. It is one of the major investors in the fund.
Tae Jin International, which established LX Investment as its investment arm in May 2015, will also participate in the fund as a limited partner. It initially created funds focused on consumer goods and earned high profits by investing in online fashion store W Concept Korea. Tae Jin International has also increased its investment in the financial sector.
The fundraising process is likely to be finished in April. LX Investment is reviewing possible investments in one or two companies to be made as soon as the fund is ready for launch. The fund plans to mostly invest in the establishment of value chains in the first half of this year and start creating a new fund in the second half.
“We are considering possible investments in multiple companies in the ESG market and plan to establish value chains in eco-friendly segments by making quick investment decisions,” said an official at LX Investment. (Reporting by Se-hun Jo)