Korea's Hahn & Co raises $3.2b for Fund III, co-invest sidecar

The private equity firm, which was founded in 2010 by Scott Hahn, formerly CIO of Morgan Stanley Private Equity Asia, is responding to what it sees as a growing large-cap investment opportunity in Korea. Four deals have been completed in the past 12 months, with $1.3 billion in equity deployed, including the $3.7 billion restructuring of SK Shipping.

The $3.2 billion is split between a $2.7 billion core fund and a $500 million co-investment fund that goes into larger transactions. SK Shipping is a notable example of this from Fund III. Hanon Systems, a $3.6 billion carve-out from Visteon Corporation in 2014, performed a similar role in Fund II. Hahn raised $1.2 billion in core equity plus a co-investment pool of $700 million to support the Hanon deal.

The private equity firm, which closed its debut vehicle at $750 million in 2011, has now raised more than $6.7 billion since inception. The fundraising process for Fund III – the target for the main vehicle was $2.5 billion – took about 18 months and included efforts to diversify the LP base, achieving a more even spread by geography and investor type. Pennsylvania State Employees’ Retirement System and Pennsylvania Public School Employees’ Retirement System are among the LPs.

Manufacturing, building materials, automobile components, and transportation and logistics all feature in the Hahn portfolio, as well as consumer products and services to a lesser degree. In addition to SK Shipping and H-Line Shipping, Korea’s leading dry bulk and wet tanker carriers, respectively, the firm owns cement producer Ssangyong Cement, K Car, a platform business comprising Joy Rent a Car and used-car retailer SK Encar.

SK Shipping is the only primary deal from the last 12 months. The other three are bolt-on acquisitions involving Hanon – which bought Magna International’s fluid pressure and controls business for $1.23 billion – and hotel portfolio Lahan.

IMM Private Equity is on course to raise the second-largest Korea-dedicated fund, having set a hard cap of $1.8 billion for its fourth vehicle. A first close of $1.3 billion came earlier this year. The firm raised $1.16 billion for Fund III. VIG Partners is also looking to scale up for its fourth fund, which has a hard cap of $850 million. The firm, which reached a first close of $530 million in May, raised $600 million for its third vehicle.

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• Topics
• North Asia
• Buyout
• GPs
• Fundraising
• South Korea
• Hahn & Co