Numerous private equity (PE) firms have submitted proposals for New Deal fund mandates in South Korea that are worth a combined 745 billion won ($680 million).
State-controlled Korea Development Bank (KDB) and Korea Growth Investment Corp (K-Growth) will award mandates on a rolling basis, with 655 billion won and 90 billion won respectively for the two categories of blind pool funds and deal-by-deal funds.
BNW Investment, which specializes in materials, parts and equipment sectors, has partnered with Kiwoom PE, while WWG Asset Management has joined hands with VL Investment, a firm that focuses on investments in environmental and energy sectors.
E&F PE, Corstone Asia, NH Investment & Securities, Crescendo Equity Partners, EastBridge Partners and Korea Investment Partners also submitted their proposals.
“A lot of PE firms have discussed possible partnerships with a co-general partner before handing in their proposals, amid rising interest in the New Deal fund,” said an industry source.
Each vehicle proposed by interested managers should invest 60% or more of its size in 40 business areas specified in government guidelines on the New Deal investment and 50% or more in smaller domestic companies, at the same time.
Final selections are expected before the end of February. Letters of commitment are likely to be issued in May, with funds expected to be created at the end of October. (Reporting by Byung-yoon Kim)