Shinhan Financial to raise $200 mn for KKR’s tailor-made funds

  • 2020-01-10

Shinhan Financial Group will raise $200 million for two KKR funds of funds (FoFs) tailor-made for the South Korean banking group, under a strategic partnership in which Shinhan plans to scale up alternative investment.

One of the two FoFs with a term of 15 years is a $150 million private equity fund, Shinhan said on Jan. 9.

Shinhan Bank, Shinhan Financial Investment Co. Ltd., Shinhan Life Insurance Co. Ltd. and Organge Life Insurance Ltd. participated as limited partners via Shinhan Alternative Investment Management Inc.

The second FoF will collect $50 million for real estate and infrastructure portfolio from the subsidiaries of Shinhan.

Orange Life, which Shinhan took over for 2.3 trillion won ($2 billion) in 2018, contributed $100 million, or half of the commitments, according to Yonhap Infomax.

KKR will invest them in a variety of its global investment products, with Shinhan involved in every decision-making process for the FoF management.

In 2018, the two companies reached a preliminary agreement to launch global M&A funds jointly, as part of strategic partnerships which include KKR’s stake purchase of Shinhan Financial.

Shinhan plans to raise an additional $300 million for KKR’s other bespoke funds by the end of the year to expand investment to a broader range of products, Yonhap Infomax added.

“By raising the tailor-made funds in partnership with KKR, we seized a good opportunity to improve alternative investment returns,” Shinhan Financial Group chairman Yong-byoung Cho said in the group’s press release.

“We will further strengthen cooperation with KKR and other global asset managers to improve global alternative investment capabilities.”

Recently, Shinhan Alternative Investment Management has raised $330 million for the Carlyle Group’s revolving loan fund targeting Korean insurance companies, in the biggest amount raised for a maiden fund in the country.

By Jieun Jeong

jeong@hankyung.com

<Edited by Yeonhee Kim>

(Photo: Getty Images Bank)