Hana Asset raises €44.2 million in FoF to invest in CVC private debt fund

  • 2017-04-14

The investment firm of South Korea’s Hana Financial Group has raised €44.2 million ($47 million) mostly from domestic life insurers through a private fund to invest in CVC Credit Partners’ European private debt fund.

Hana Asset Management Co. Ltd. said on April 13 that the fund of funds (FOF) closed at the end of March and offered an expected return at the lower end of the 6% or 7% range per annum for a seven-year investment period.

The CVC Credit Partners’ European Mid-Market Solution Fund, in which the Hana FoF is to invest, will provide financing to mid-market companies in Europe with €10 million and €75 million in earnings before interest, tax, depreciation and amortization.

The investment principal and 70% of dividend incomes will be hedged against currency risks.

The direct lending market in Europe is expected to continue to grow, led by funding for larger transactions, CVC Credit Partners said in its 2017 credit market outlook in late January. It expects mid-market credit to generate a meaningful yield premium over broadly syndicated loans and bonds.

South Korean investors are raising their appetite for overseas private debt funds which tend to be quicker in investment execution and redemption than buyout private equity funds, and generate a steady stream of returns.

Last year Hana Asset teamed up with unidentified local institutional investors to acquire about $300 million worth of senior loans secured on distribution centers of a Warburg Pincus-backed logistics firm.

Hana also had invested $110 million in principal-protected debts issued by Kohlberg Kravis Roberts (KKR) & Co. late last year, in conjunction with six South Korean pension funds.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>