PennSERS to invest $75m in Hahn & Co's Korea fund

A total of $50 million will go into the main fund with $25 million earmarked for a sidecar vehicle. The private equity firm is said to be targeting around $2 billion, but AVCJ understands this will be split across two vehicles, as the PennSERS announcement appears to confirm. The structure gives Hahn & Co. the flexibility to pursue middle-market deals from the main fund with the option of calling on additional capital for larger corporate carve-out transactions.

The GP, which was set up in 2010 by Scott Hahn, formerly CIO of Morgan Stanley Private Equity Asia, raised $750 million for its debut fund. A successor fund closed at the hard cap of $1.2 billion in early 2015, but there was also a separate co-investment pool of $700 million to support the $3.6 billion acquisition of Halla Visteon Climate Control Corp. The business is now known as Hanon Systems.

PennSERS got exposure to Hahn & Co's first fund via Asia Alternatives as well as a $7 million commitment through a separate vehicle. It then made a direct investment of $50 million into Fund II.

As of December 2017, the pension system had $29.1 billion in assets, of which $3.97 billion – or 13.6% - was deployed in private equity. This compares to $4.13 billion out of $27.1 billion in 2016. PennSERS had $2.42 billion in buyouts, $608.7 million in special situations, and $946.7 million in venture capital.

Its allocations to real estate and multi-strategy, which includes private credit and opportunistic equity and fixed income, were 7.5% and 7.3%, respectively.

PennSERS has a longstanding relationship with Asia Alternatives, backing the manager's first three fund-of-funds and then establishing a separate account called Penn Asian Investors. The vehicle had $83 million in capital as of December 2016. The pension system returned with a $50 million commitment for Fund V – which closed at $1.8 billion last year – and put another $50 million into Penn Asian Investors.

The LP has regional exposure through Bain Capital's debut Asia fund, TPG Capital's fourth and fifth Asia vehicles, RRJ Capital's third fund, H&Q's Asia Pacific Growth Fund III, Excelsior Capital Asia Partners III, and Avenue Asia Special Situations Fund IV. In addition to Hahn & CO, the portfolio also includes Primavera Capital Fund II, Baring India Private Equity Fund III, ADV Opportunities Fund I, CID Greater China Venture Capital Fund II, and Lightspeed India Partners I.

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• Topics
• North Asia
• North America
• LPs
• Fundraising
• Buyout
• South Korea
• Hahn & Co
• Pennsylvania State Employees’ Retirement System (PennSERS)