Eyes on JC Partners' investment activities The South Korean PE firm has been active in fundraising, investing and exiting

Translated by Kim So-in 공개 2020-03-19 08:00:44

이 기사는 2020년 03월 19일 08:00 더벨 유료페이지에 표출된 기사입니다.

South Korea’s private equity (PE) firm JC Partners is garnering a lot of attention with the firm carrying out robust activities in fundraising, investing and exiting.

JC Partners has been conducting due diligence to acquire Logen Logistics and KDB Life Insurance since the beginning of March, sources with knowledge of the matter said on Monday. For the acquisition of MG Non-Life Insurance which the PE firm has put a lot of efforts into, the eligibility screening of the large shareholder is around the corner.

Given Lee Jong-chul, founder of JC Partners, branched out on his own from Orix Private Equity in July 2018, JC Partners’ robust activities are more than enough to attract markets’ attention. The relatively newly-formed PE firm has put efforts into expanding and restructuring the organization.

About one year after its establishment, JC Partners has made a series of investments including B&H, precision components producer Nedec, and AMT. In October 2019, the PE firm formed a consortium with B&H, in which JC Partners acquired a 100 percent stake, to buy a 45 percent stake in AMT.

JC Partners invested 20 billion won in Japanese power producer eRex at the beginning of 2019 and reaped around five billion won in just six months. The internal rate of return (IRR) was 101 percent. The PE firm is mulling over reinvesting in biomass plants in Japan.

JC Partners has changed its fundraising strategies. The firm has recently shifted its focus from project funds to investment programs led by institutional investors. JC Partners has applied for a role as an external manager in investment programs led by Korea Development Bank (KDB) and the country’s state-led fund of funds manager Korea Growth Investment (K-Growth).

“JC Partners, which has built track records and made exits since its separation from Orix PE, has applied for investment programs to launch blind-pool funds,” said a PE industry source, adding, “The PE firm is likely to strengthen its relationship with institutional investors by participating in the programs.”

JC Partners is one of the potential buyers of two target companies in the domestic M&A industry including Logen Logistics and KDB Life Insurance. Some view that the fact that the PE firm has to secure funding worth hundreds of billions of won can be burdensome.

When an EBITDA multiple for Logen’s peer group (10x) is applied, the enterprise value (EV) of Logen amounts to 400 billion won. The EV of KDB Life Insurance is estimated at 419.2 billion won when a price book-value ratio of its peer group (0.37x) is multiplied by its net asset.

“Logen and KDB Life have had difficulties finding potential buyers so far,” said an M&A industry source, adding, “Market watchers are paying attention to how the deals will unfold with financial investors including JC Partners looking for partners to form a consortium.”

(By reporter Rho Ar-rum)
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