VIG hits $530m first close on fourth Korean fund

The vehicle launched at the start of the year with a target of $800 million. The hard cap has been set at $850 million, according to a source familiar with the situation. Local financial institutions that have backed VIG since its inception contributed $200 million to the first close. The rest came from overseas LPs, including fund-of-funds, US and European insurers, and North American pension funds.

The National Pension Service of Korea (NPS) – another longstanding domestic supporter of VIG – is expected to make four allocations to Korean mid-market managers of this vintage in July.

The $330 million from overseas investors is a step up from VIG’s previous funds. There were only a couple of foreign institutional LPs in Fund II, which took approximately two years to close at $350 million in late 2013, short of the $650 million target. The fundraising process for VIG’s third vehicle was much smoother, with the firm taking less than a year to hit its hard cap of $600 million in 2017. Overseas investors contributed $180 million.

Improving LP sentiment can be linked to exits. VIG launched Fund III having fully exited its first vehicle and with one full realization and one partial realization from Fund II – the sale of the Burger King master franchise for Korea for a 2.5x return and a dividend recap on Samyang Optics. Samyang went on to list, facilitating another partial exit, and then last year Summerce Platform, operator of online price comparison website Enuri.com, was sold to a local e-commerce player for a 2.1x return.

VIG’s strategy remains control investments in mid-market companies, primarily in the domestic consumption space. Founder succession situations and corporate carve-outs are the most common origination scenarios. Investments in the past 12 months include fried chicken restaurant franchisor Bonchon International, eyewear retailer Star Vision, and the bolt-on of Wilson Parking Korea by HiParking.

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• Topics
• North Asia
• Fundraising
• Buyout
• GPs
• LPs
• South Korea
• VIG Partners