Blackstone, Carlyle, TPG raise over $100 mn from network-hungry Korean firms

  • 2017-11-06

Three global private equity firms – Blackstone, Carlyle and TPG – have gathered an aggregate $113 million in commitments from South Korean institutional investors at their first closing of Asia-focused buyout funds as they are seeking to raise billions of dollars for new funds to target Asian assets.

In particular, Carlyle and TPG attracted brokerage Korea Investment & Securities Co. Ltd. that committed a total of $40 million to their new funds in its first principal investment in global private equity funds.

The commitments came a year after Samsung Securities Co. Ltd. became the first Korean brokerage firm investing in a global buyout fund, with the $17 million commitment to KKR Asian Fund Ⅲ that closed at $9.3 billion in June, the largest for an Asia investment fund.

Both Samsung Securities and Korea Investment hope their principal investments in the funds will help build networks with private equity giants and lead to new business opportunities such as co-investment and M&A financing for Asian M&A deals as private equity is taking a bigger share of global M&A transactions.

The two brokerage houses beefed up their equity capital to over 4 trillion won ($3.6 billion) each through rights offering, or sales of their own shares late last year, in a move seen as expanding investment banking businesses with bolstered capital bases.

Korea Investment has decided to commit $25 million to Carlyle and $15 million to TPG with no intention of resale, according to investment banking sources on Nov. 3.

It raised its equity capital by as much as 1.7 trillion won through rights offering in 2016, saying in a regulatory filing last November that the proceeds will be used as operating expenses.

The two funds of Carlyle and TPG closed first-round fundraisings in early and mid-October and plan to secure additional commitments from other investors by early next year.

Carlyle reportedly aims to raise $5 billion and TPG targets $4 billion at final closes of the new Asia buyout funds.

Separately, Blackstone’s first Asia-focused buyout fund has received around $73 million in commitments from unidentified South Korean institutional investors at the recent first close on $1.1 billion. The fund is targeting $2 billion at final close.

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South Korean pension and retirement savings funds, which have been increasing allocations to global funds, are expected to participate in the funds as co-investors or in the second-round fundraising, according to those sources.

South Korea’s big asset owners, latecomers to global alternative investment markets, are keen to build networks with established general partners to source deals.

Kyung Cheol Jeon, a general manager of Hyundai Marine & Fire Insurance Co. Ltd., said last month that the insurer would continue to invest in blind-pool funds so as to maintain relationships with capable GPs and to secure good deals.

By Daehun Kim

daepun@hankyung.com

<Edited by Yeonhee Kim>

Photo: Getty Images Bank

(Modified on Nov. 9, 2017 to correct 10th paragraph and the table: Woori Bank has not committed to the Blackstone’s first Asia-focused buyout fund.)