Mid-sized PE firms eye more capital raising as year-end approaches Three Korean institutions in process of selecting funds to award PE mandates

Translated by Ryu Ho-joung 공개 2021-10-22 08:19:41

이 기사는 2021년 10월 22일 08:10 더벨 유료페이지에 표출된 기사입니다.

With 2021 coming to an end, mid-sized private equity firms are eyeing South Korean limited partners who have not yet awarded mandates this year in order to raise more capital.

Three South Korea-based institutional investors are currently in the process of selecting managers to put money into private equity.

Yellow Umbrella, the mutual-aid association overseen by the Korea Federation of Small and Mid-sized Enterprises, in July released a request for proposals (RFP) looking for eight private equity managers to award mandates worth 240 billion won ($204 million) in total, with interviews underway for the shortlisted candidates.

The Military Mutual Aid Association and the labor ministry’s Industrial Accident Compensation Insurance and Prevention Fund also issued RFPs earlier this month to award private equity mandates totaling 150 billion won and 100 billion won, respectively.

The tender processes run by these investors are expected to be dominated by private equity firms at the later stage of fundraising as they make their final push to secure more capital for their funds.

The South Korean market has seen fundraising activities led by mid-sized managers so far this year, with many of major private equity firms closing their latest funds only last year.

In June this year, Keistone Partners, E&F Private Equity, Crescendo Equity Partners, Ium Private Equity and Premier Partners won a combined 600 billion won private equity mandates from the National Pension Service, one of the country’s largest institutional investors with 919 trillion won in assets under management.

The five mid-sized managers were also selected by Korean Teachers' Credit Union in July to receive capital commitments of 400 billion won in total.

Ium Private Equity and Crescendo Equity recently secured additional capital from Teachers’ Pension, Korea Post and the Scientists and Engineers Mutual-aid Association, which awarded mandates totaling 260 billion won, 200 billion won and 120 billion won, respectively, in September and October.

Among other institutional investors that could seek private equity managers before the year’s end is the Pension Foundation of the General Assembly of the Presbyterian Church of Korea.

The foundation, which had approximately 540 billion won in assets under management at the end of 2020, has continued to increase its allocation to alternative investments in the past years. Mid-sized managers have kept on an eye on smaller public foundations like the Presbyterian Church foundation as an opportunity to diversify the pool of limited partners.

The Presbyterian Church foundation has regularly awarded mandates for its alternative investment strategies in recent years. Most recently, it picked JKL Partners in the second half of 2020 for a private equity mandate. (Reporting by Hee-yeon Han)
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