이 기사는 2020년 02월 27일 08:00 thebell 에 표출된 기사입니다.

Yellow Umbrella, South Korea’s mutual-aid association for small and mid-sized business owners under Korea Federation of Small and Medium-sized Businesses (KBIZ), has altered its alterative investment program in a way that other institutions never tried before, drawing close attention from PE firms.

Yellow Umbrella is in the process of selecting three PE managers that, if selected, would receive a combined 60 billion won in commitments from the institution. It has recently begun conducting due diligence on the shortlisted firms, sources closed to the matter said on Monday.

The investment program currently underway focuses on small and mid-sized PE firms, with Yellow Umbrella specifying in its announcement released last month that a maximum fund size should be 200 billion won or less. And later this year, it plans to launch another investment program that targets PE funds with a greater size. This is a significant change from previous ones.

The intention of the change is to put alternative managers into competition based on their size. Normally, South Korean institutions, such as pension funds and mutual-aid associations, launch their investment programs on a regular basis – about once a year – to allocate capital to PE funds.

There have been cases before of these institutions separating applicants by size to offer opportunities to smaller firms. But Yellow Umbrella from this year is taking a different approach from others, planning to implement its investment programs separately at a different time of year based on the fund size – a move welcomed by many domestic PE firms.

In addition, it has removed a qualification requirement in which candidates had to previously secure a certain level of commitments from other domestic institutions, allowing more firms – including those that just began raising capital for their new funds – to submit proposals.

KBIZ has accelerated efforts to enhance the competence and independence of its asset management team since Chairman Kim Ki-mun took office last March. It appointed a former chief investment officer (CIO) of the Scientists and Engineers Mutual Aid Association (SEMA) as its new CIO last May, followed by a recent restructuring to elevate the asset management unit to an independent division.

Yellow Umbrella has seen a rapid growth of its total assets for the past few years: Its assets under management almost doubled to more than 10.6 trillion won as of the end of June 2019 from about 5.3 trillion won three years ago.

Its allocation to alternative assets has also increased to 1.1 trillion won, from a mere 284 billion won, for the same period. In 2019, alternative bets accounted for 13 percent, or about 1.5 trillion won, of Yellow Umbrella’s total assets under management. This year, it reportedly earmarked about 600 billion won, as in previous years, for its new investments in alternative assets.

“Yellow Umbrella, among other LPs, is receiving close attention from the industry, as its assets under management are expected to grow fast in the coming years given a rapid increase in the number of small and mid-sized business owners in the country,” said an official at a PE firm. “It still has relatively less experience in alternative investments,” he noted.

(By reporter Han Hee-yeon)