Yellow Umbrella has narrowed down the list of candidates for private equity mandates worth a combined 200 billion won ($176 million), with many of those shortlisted also chosen by the National Pension Service of Korea (NPS) earlier this year.
The mutual aid association under the Korea Federation of Small and Medium Businesses informed the shortlisted managers individually on Wednesday (October 28), according to sources. It received 10 to 12 proposals from private equity managers, and most are likely to have been included in the shortlist, because Yellow Umbrella said in its July request for proposals that the number selected for the next stage of the competition would be double the number of mandates (six).
The organization will conduct interviews on Thursday (November 5), and then conduct on-site due diligence. A final selection is expected before the end of this month.
“Yellow Umbrella is speeding up the selection process after weeks of delay due to the hold-up in the award of venture capital mandates,” an industry insider said.
A new category has been created in this competition for managers that haven’t worked with the organization before, which is seen as an effort to broaden the manager roster. Two of the six private equity mandates have been allocated to this category.
Industry watchers expect Glenwood Private Equity (Glenwood PE) to be awarded one of the category’s two mandates.
“Glenwood PE is very likely to be included in the final list because it has a proven record and also has the NPS as the anchor investor,” said an official at one private equity firm in Seoul. “Among other strong candidates is Keystone Private Equity, which has a strong performance record in restructuring deals.”
Most of the shortlisted candidates for the remaining four mandates, including Glenwood PE, IMM Investment, JKL Partners and Macquarie Korea Asset Management, were chosen by the NPS in June and are also likely to be selected by Yellow Umbrella, industry watchers said.
Yellow Umbrella started awarding private equity mandates in 2017. In April it awarded three mandates worth a combined 60 billion won to LB Private Equity, Lindeman Asia Investment and KTB Private Equity. (Reporting by Byung-yoon Kim)