Global Top 4 PEFs Compete to Enter Korea Targeting Prime Assets

Apollo PEF Follows Blackstone, Intensifies Activities in Korea
KKR, Carlyle Expand Operations Targeting Undervalued Assets

[Asia Economy Reporter Park So-yeon] Amid rising interest rates and recession concerns, asset prices have generally plummeted, leading to a contraction in the investment industry. However, global fund managers are analyzing that now is the right time to invest in quality domestic companies or assets. While the domestic financial market is focusing on risk management and hesitating, global funds aiming to seize opportunities are formulating aggressive investment strategies.

◇ Apollo, the No.1 Private Credit Fund Manager, Enters Korea... Targeting Alternatives in the Financial Sector = Apollo is expected to gradually expand its scope from establishing private credit funds (PCF) to private equity funds (PEF) and real estate. Although the domestic market for PEFs, which focus on management participation, has grown, the private credit market is still at an early stage. Until the revision of the Capital Markets Act last year, private fund managers were restricted from handling loans and credit products. Additionally, the variety of financial services such as project financing (PF) provided by banks in Korea is cited as a reason why the private credit market has not developed.

However, recently, as major financial institutions have started thorough risk management, PF loans have been cut off, and with soaring interest rates, domestic companies have faced the situation of having to raise funds through channels other than the primary and secondary financial sectors. Fortunately, with the revision of the Capital Markets Act at the end of last year, private fund managers were also allowed to handle credit products such as loans. The world's No.1 PCF manager has seized this opportunity without hesitation.

◇ Global Private Equity Funds Enter One After Another... A Market Opens in Korea = Currently, foreign fund managers such as KKR, Carlyle, TPG, Bain Capital, CVC, Baring PEA, and Affinity Equity Partners operate offices in Korea and are increasing the hiring of Korean investment professionals. In particular, KKR recently expanded its staff to 30, and the European PEF EQT Partners even acquired Baring PEA.

The world's No.1 private equity fund, Blackstone, also re-entered Korea this year. About eight years ago, Blackstone withdrew its office after failing to achieve significant results in the Korean market, but this year it ambitiously established a Korean corporation. It has built a strong lineup by recruiting Ha Young-gu, former chairman of the Korea Federation of Banks, a financial heavyweight, and Kim Tae-rae, a real estate investment expert from global competitor Angelo Gordon, as CEO.

A prominent domestic PEF official said, "While global PEFs may find it difficult to immediately stand out in the domestic M&A market due to the need for human networks, it is true that the strong dollar situation makes the market advantageous for them."

This content was produced with the assistance of AI translation services.