MBK closes fourth North Asia fund at $4.1b

According to a source familiar with the situation, the fundraising process took approximately two months. Ontario Teachers' Pension Plan (OTPP) and Canada Pension Plan Investment Board (CPPIB), which have backed the GP since founder Michael B. Kim (pictured) spun out from The Carlyle Group 10 years ago, are once again the largest LPs in the fund.

Other substantial commitments came from Singapore-based Temasek Holdings and Chinese sovereign wealth fund China Investment Corporation (CIC). Demand for allocations to the vehicle is said to have run to $7.5 billion.

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. Fund III closed in October 2013.

Last year, the GP completed Asia's largest-ever private equity buyout based on enterprise valuation with the acquisition of Homeplus - Tesco's South Korea unit - for $6.4 billion. CPPIB committed $534 million to the deal as a co-investor, with other contributions coming from Temasek Holdings and Canada's Public Sector Pension Investment Board.

More recently, MBK has bought Doosan Infracore's machine tools division for $881.5 million, agreed to acquire Hong Kong telecom services provider Wharf T&T for $1.2 billion in conjunction with TPG Capital, and submitted a tender offer for Japanese golf course operator Accordia Golf that values the business at $912 million.

The PE firm said it delivered a record $2.7 billion in realizations in 2015. These included: a partial sale of New China Life; a leveraged recapitalization of Japan's Komeda Coffee (a partial exit came in June 2016 when the company listed); an IPO exit from Japan's Tasaki; the sale of a 51% stake in Universal Studios Japan; the sale of HK Savings Bank in Korea; and the sale of Beijing Bowei Airport Support.

MBK also completed a leveraged recap on Taiwan-based China Network Systems (CNS) and was awaiting a full exit expected to generate a return of 2.94x, including distributions. However, in September the Taiwan government declined to approve the sale to Morgan Stanley Private Equity Asia and Far EasTone Telecommunications, and asked the telecom regulator to reconsider certain elements of the deal.

ING Life Korea was the subject of another leveraged recap, although a sale of the asset has yet to come, despite MBK running a process earlier in the year. The PE firm also suspended plans to sell Korean water purifier business Coway because the stock is thought to be undervalued following product safety issues.

Prior to closing Fund IV, Kuo-Chan Kung, a partner and head of Greater China at MBK - and a member of the original team that spun out from Carlyle - announced he would leave the firm.

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• Topics
• North Asia
• Fundraising
• Buyout
• GPs
• LPs
• South Korea
• MBK Partners
• OTPP
• CPPIB
• Asia
• CIC
• Temasek Holdings