MBK loses Greater China head KC Kung

The departure was first reported by The Wall Street Journal and has since been confirmed by AVCJ. Kung (seated center right in the image), who resigned his position to pursue personal interests, will leave at the end of the month. The change comes as MBK looks to raise $4 billion for its fourth North Asia-focused buyout fund.

Kung spent seven years as a managing director at Carlyle, working alongside MBK founder Michael Kim, who was the private equity firm's Asia president and responsible for non-Japan buyouts in the region. He is one of four Carlyle alumni among MBK's current eight partners. Before joining Carlyle, Kung worked for McKinsey & Company.

MBK, which targets control deals in South Korea, Japan and Greater China, raised $1.56 billion for its debut fund in 2006 and closed Fund II at $1.6 billion three years later. A third vehicle closed at the hard cap of $2.7 billion in 2013.

Kung is a board member of portfolio companies Beijing Bowei Airport Support, China Network Systems (CNS) and Apex Logistics. Freight forwarder Apex is the most recent of these investments, with MBK committing $84.5 million for a majority stake in June of last year. Bowei was sold to Zhisheng Lianfa Information Technology in April 2016, generating a 1.17x return, according to MBK's 2015 annual letter.

The letter also provides details on the pending exit of Taiwan-based cable TV provider CNS, which the GP bought in 2006 for $1.5 billion and agreed to sell last year to Morgan Stanley Private Equity Asia and Far EasTone Telecommunications for an enterprise valuation of $2.3 billion. Together with $414 million in distributions to date, MBK expects a 2.94x multiple and a 15.7x IRR.

However, last month the Ministry of Economic Affairs asked the communications regulator - which had already approved the transaction - to reconsider certain elements of the deal. Various politicians have expressed concerns that the structure could allow Far EasTone to take control of CNS, in violation of current regulations.

Kung was also involved in MBK's acquisition of Chinese waste and wastewater treatment specialist GSE Investment Corp. in 2009. It was sold to Beijing Enterprises Holdings in 2014 for $356 million, generating a 2.77x multiple and a 24.2% IRR. The GP's other Greater China deals include Taiwan's Gala TV, Luye Pharma and New China Life Insurance. The first two were exited via secondary sales while the third went public.

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