Transferring 94% Stake... IMM PE Bets on Long-Term Holding of AirFirst

Corporate Value Tripled, But "Confident in Further Growth"

Most LPs Expected to Reinvest... Attracting New Capital as Well

Signaling a Commitment to Long-Term Partnership and Growth

IMM Private Equity (IMM PE), a private equity fund (PEF) manager, has made the long-term holding of AirFirst, a semiconductor industrial gas company, its core objective for this year. For the first time, IMM PE is introducing a continuation fund structure that allows it to transfer existing fund assets to another fund, aiming to maximize corporate value without being constrained by fund maturity. Although AirFirst’s value has nearly tripled since the initial investment, IMM PE believes there is still significant upside potential, considering the structural growth trend in the semiconductor industry.

According to the investment banking (IB) industry on May 4, IMM PE has designated the transfer of AirFirst from its existing fund to a continuation fund as its top priority this year, naming the initiative "Project Evergreen." This marks the first time IMM PE is pursuing a continuation fund. The strategy involves moving AirFirst, previously held in a typical buyout fund with a maturity of 5 to 10 years, into an ultra-long-term fund structure to foster greater corporate value over a longer horizon.

IMM PE acquired 100% of AirFirst’s shares for 1.4 trillion won in 2019. AirFirst produces industrial gases such as nitrogen, argon, and oxygen, supplying them to companies including SK hynix and LG Chem. As the semiconductor sector boomed, AirFirst’s performance improved and its valuation rose significantly. When IMM PE sold a 30% stake in AirFirst to global asset manager BlackRock in 2023, the company was valued at approximately 3.7 trillion won. IMM PE currently holds 70% of AirFirst through its blind funds Rose Gold 3, Rose Gold 4, and Rose Gold 5, as well as a co-investment fund.

The shares being transferred this time are those held by Rose Gold 3, Rose Gold 4, and the co-investment fund among IMM PE’s 70% stake in AirFirst. This accounts for about 94% of IMM PE’s total holding. Rose Gold 5, being relatively newly established, is considered to have sufficient time left before maturity.

During the fund transfer process, IMM PE plans to offer some limited partners (LPs) the opportunity to exit their investments, while reinvesting alongside LPs who wish to remain. Most LPs reportedly have a positive outlook on reinvestment. IMM PE’s decision to reject multiple proposals to sell AirFirst and instead pursue a long-term holding strategy is seen in this context. In addition, IMM PE plans to recruit new LPs to further strengthen the foundation for long-term management.

This structure is also highly symbolic within the domestic PEF industry. Unlike the typical limited cycle of investment, exit, and liquidation seen in traditional private equity funds, an evergreen fund has no maturity or an extremely long one, enabling long-term holdings. Investors can periodically make additional contributions or redemptions, and, true to its name, the fund can exist for an extended period like an evergreen tree. Overseas, such funds are often managed with funds from high-net-worth individuals. The use of "evergreen" in the project name underscores IMM PE’s perspective of AirFirst not as a short-term exit target but as a long-term compounding asset. In an environment where the industry as a whole is again facing criticism as "corporate raiders" following the Homeplus incident, IMM PE is signaling its intention to be a stable partner committed to the long-term growth of the company, rather than simply acting as a financial investor who buys and resells companies.

IMM PE has already managed AirFirst for nearly seven years, driving significant performance improvements. At the time of acquisition, AirFirst had sales of 268.9 billion won and operating profit of 51.4 billion won; last year, sales reached 652.8 billion won and operating profit was 94.8 billion won—demonstrating a substantial increase in scale. An IMM PE representative explained, "Rather than simply investing and exiting, we designed a structure where a proven general partner (GP) continuously leads management, maximizing customer relationships and new project acquisitions. Based on our accumulated operational experience and industry understanding, we see considerable potential for additional value creation and have decided to pursue long-term holding and growth."

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