Hahn & Co in $900m first close on second Korea fund
South Korean GP Hahn & Co – which was founded by Scott Hahn, formerly CIO of Morgan Stanley Private Equity Asia (MSPEA) – has reached a first close of approximately $900 million on its second fund.
The vehicle launched two-and-a-half months ago with a target of $900 million and a $1.2 billion hard cap. With strong demand from new and existing investors, a final close at the hard cap is expected by December, according to a source familiar with the situation.
Hahn left MSPEA in 2010 to start his own venture and the debut fund closed at $750 million in August 2011 after about one year in the market. The original target was $600 million. There are said to be two anchor investors in Fund I - Temasek Holdings and Asia Alternatives Management - and about 30 LPs in total.
The first fund is now about 80% drawn down and two investments are nearing the exit stage. Cowell e-Holdings, a supplier of mobile devices and optical parts, recently filed for an IPO in Hong Kong. The acquisition and de-listing of the company from KOSDAQ in 2011 was Hahn & Co's first investment.
A second portfolio company, Ssangyong Cement, is also being primed for sale. The private equity firm took a 10% stake in the business in 2012. It was part of a consortium alongside Korea Development Bank (KDB), Seoul Guarantee Insurance and Shinhan Bank that acquired a 47% interest through a debt-for-equity swap.
Hahn & Co. bought another cement asset in 2012 - Daehan Cement - via a court sale process after parent company Daehan Group allowed the company to slop into insolvency. The PE firm also went through a court receivership auction to acquire a majority stake in Woongjin Foods but withdrew from a similar process for dry bulk carrier Korea Line.
Late last year Hahn & Co. secured a shipping deal when it agreed to spin-out certain bulk and liquefied natural gas (LNG) shipping businesses from Hanjin, Korea's leading carrier. The assets are now held in a joint venture that is 76%-owned by the PE firm, with Hanjin holding 24%.
Private equity investment in South Korea stands at $24.1 billion since January 2012, only $700 million short of the total for the previous five years combined. Buyouts alone reached $4.9 billion in 2013, accounting for 17.2% of the regional buyout total. So far this year, these transactions have come to $4.8 billion, more than one quarter of the regional total.
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