Korea Development Bank (KDB) received six proposals for a 170 billion won ($150 million) private equity mandate that aligns with the government’s ambitions to strengthen ties with Association of Southeast Asian Nations (ASEAN) economies.
The state-run bank issued a request about one month ago for proposals for the so-called New Southern Funds, which invest in the ASEAN region. Six candidates – STIC Investments, Affirma Capital, EastBridge Partners, J&W Partners, a consortium of SV Investment and Shenzhen Capital Group Company, and a consortium of Woori Private Equity and LX Investment – took part in a selection competition for three managers, according to a notice posted on the bank’s website on Friday (October 23).
Interviews and on-sight due diligence will follow, with a final selection expected before the end of November.
The competition is divided into two categories: large funds and smaller funds. The first three managers applied for the category of large funds, which must raise 300 billion won or more, including a capital commitment from KDB. The remaining three candidates will compete for a smaller fund mandate with a minimum fund size of 100 billion won.
KDB will allocate a total of 170 billion won to three funds – 140 billion won commitments to two large funds, and a 30 billion won commitment to one smaller fund. The term of each fund is eight years, with an investment period of four years.
The move is consistent with the government’s New Southern Policy, which aims to pursue stronger ties with ASEAN countries. The funds will primarily invest in South Korean companies seeking to enter or expand into the region and ASEAN firms that have a business relationship with South Korean companies. (Reporting by Hee-yeon Han)