South Korea’s Vogo raises $350m for Fund II

The fund has been in the market for over year, having reached a first close in August 2012. The original target was $650 million.

While there are a couple of foreign institutional investors, the vast majority of the capital comes from domestic sources. NPS selected Vogo as one of three buyout funds in its domestic allocation and has agreed to contribute around $120 million.

According to Jason Shin, managing partner at the private equity firm, foreign investors were wary because the GP's first fund, which closed in 2005 at $573 million, is not fully exited.

The major outstanding asset is Tong Yang Life Insurance. Vogo owns around 64% of the business, having bought a 17.7% stake in 2006 in the understanding that it would get first refusal on any future sale of a holding in excess of 30%. This duly happened in late 2010 as the PE firm picked up an additional 46.5% for $798 million. A dedicated pool of capital was raised to cover this transaction.

There have been numerous reports of strategic interest in Tong Yang but nothing has come to fruition.

"Foreign LPs wanted to see a fuller exit from Fund I whereas domestic LPs were quite comfortable that even though Tong Yang is not exited, the underlying operating performance of the asset itself is very good," Shin said.

Vogo has already committed about $120 million in equity from Fund II through acquisitions of the Burger King Korea franchise and Samyang Optics, a manufacturer of interchangeable lenses for digital single-lens reflex cameras. Samyang is one of 4-5 companies globally specializing in interchangeable lenses, and the only one based in Korea.

"We continue to see strong buyout opportunities in Korea, whether large public auctions or smaller proprietary transactions," Shin added.

PE investment in the country stands at $7.5 billion year-to-date, exceeding the 2012 full-year total by a mere $100 million. However, the buyout share has increased by two thirds to $4 billion, the highest level on record. South Korea accounts for 18% of total Asia buyout deal flow in 2013, up from 8.6% in 2012.

UBS served as placement agent for Vogo Fund II.

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• Topics
• Fundraising
• North Asia
• Buyout
• South Korea
• buyout
• Fundraising
• Vogo Investment