VIG reaches $810m final close on fourth Korean fund

The vehicle launched at the start of 2019 with a target of $800 million. A first close of $530 million came last May and the hard cap was set at $850 million. 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.

Last July, the National Pension Service of Korea (NPS) named VIG as one of four mid-cap managers – alongside H&Q Korea Partners, Praxis Capital Partners, and SG Private Equity – that would share a pool of KRW600 billion. The pension fund is a longstanding domestic supporter of VIG.

The private equity firm struggled to raise its second fund, spending two years in the market before closing in 2013 at $350 million, short of the $650 million target. There were only a couple of foreign institutional LPs. The fundraising processes for the third and fourth vehicles were each approximately 12 months.

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 in 2017, facilitating another partial exit, and then Summerce Platform, operator of online price comparison website Enuri.com, was sold to a local e-commerce player for a 2.1x return in 2018.

Since the first close on Fund IV, VIG has completed its exit from Samyang with a gross multiple of 3.5x as a private equity fund affiliated to LIG Group bought the private equity firm’s outstanding 60% interest. This was followed by an agreement to sell HiParking – a parking management business bolstered by the acquisition of Wilson Parking Korea – to Humax for KRW170 billion. VIG stood to generate a 3.2x return.

The strategy remains control investments in mid-market companies with enterprise valuations of $70-500 million, primarily in the domestic consumption space. Founder succession situations and corporate carve-outs are the most common origination scenarios. The first investment from Fund IV – announced last October – was the purchase of a controlling stake in D.Share, an online-offline English language education provider, for KRW165 billion.

VIG Partners Fund IV is the fourth-largest Korea-focused private equity vehicle raised by an independent GP. Hahn & Company is responsible for the two largest, having closed its third fund at $3.2 billion in October. IMM Private Equity is on course to secure second spot. The hard cap for its fourth fund has been set at $1.8 billion, following a first close of $1.3 billion last year.

MVision was the placement agent for VIG’s latest fund, with Debevoise & Plimpton and Kim & Chang serving as fund formation counsel.

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