Private equity firms are actively seeking co-general partners (co-GP) to become one of the external managers of Korea Growth Investment Corp (K-Growth)’s corporate restructuring fund.
Multiple PE firms are reviewing an option to participate in the investment program with a co-GP to receive capital commitments from K-Growth, according to sources on June 25. Four out of five applicants for the fund have joined the race with their co-GPs.
Korea Investment Private Equity (KI PE) – formerly known as EQ Partners – has joined hands with SG Private Equity. KI PE is likely to emphasize its recent successful sale of Dreamline.
KI PE has sold its controlling stake in Dreamline, the communications service company it acquired in 2014, through which it has made an internal rate of return (IRR) of more than 20%. Thanks to the PE firm’s turnaround efforts, Dreamline’s debt ratio dropped to the 100% range in 2019 from 2000% in 2014, with an operating margin standing at 10% last year.
SG PE won many mandates from major domestic investors last year, including K-Growth, the Korean Teachers Credit Union (KTCU), Yellow Umbrella, the National Pension Service (NPS) and the Scientists and Engineers Mutual-Aid Association (SEMA). The PE firm closed its third blind-pool fund at 490 billion won at the beginning of this year.
Fine Asset Management is expected to participate in the race jointly with KB Investment to manage the fund. Fine Asset Management was spun off from Fine Partners in 2017. Fine Partners was established in 1984, specializing in non-performing loans and corporate financing.
KB Investment specializes in Korean shipbuilding industry’s restructuring. KB Investment won the mandate from Korea Venture Investment Corp. jointly with POSCO Capital in 2016 to manage a restructuring fund to support the nation’s shipbuilding industry. KB Investment and POSCO Capital launched a 40 billion won restructuring fund and acquired convertible bonds worth 8 billion won issued by marine engine parts manufacturer Cape in 2018.
Cactus Private Equity, the Industrial Bank of Korea, Everbest Partners and Hana Financial Investment are also expected to join hands to apply to become an external manager of K-Growth’s corporate restructuring fund.
In 2018, NH Investment & Securities-Opus Private Equity, Woori Private Equity-Q Capital Partners and Mirae Asset Venture Investment-Curious Partners were selected as external managers of the fund.
Last year, NAU IB Capital-KB Securities, Eugene Asset Management-Shinyoung Securities and UAMCO-Keystone Private Equity were picked as external managers of the fund. (Reporting by Byung-yoon Kim)