LG Chem to anchor IMM's Korea battery fund
IMM Private Equity’s recently established credit unit has launched a KRW400 billion ($353 million) Korea-focused fund that will invest in components for electric vehicle (EV) batteries and other environmentally friendly industrial materials.
LG Chem, Korea’s largest chemicals producer and a subsidiary of conglomerate LG Corporation, has agreed to invest KRW150 billion as an anchor LP. This is the first time it has taken on such a role for a fund raised by an external asset manager.
IMM Credit Solution completed its debut deal earlier this month, picking up a 40% stake in SK Lubricants for KRW1.09 trillion. Other local GPs are said to be considering similar expansions, with VIG Partners recently recruited the lead executive for Korea special situations strategies at Goldman Sachs. A source close to VIG said that no formal decision had been made to establish a dedicated credit team.
The new vehicle is called the Korea Battery & ESG Fund and referred to by SK Chem as a company incubation fund. The broad remit is to invest in environment, social, and governance-related technologies, leveraging LG Chem’s industrial expertise and IMM’s deal sourcing and execution skills.
The main target area relates to components for EV batteries, such as cathode and anode material manufacturing and recycling core metals for batteries. Opportunities will also be considered in the recycling of waste plastics and the development of biodegradable plastic technologies.
“This investment will become the steppingstone for LG Chem to strengthen the ESG industrial ecosystem together with prospective SMEs and medium-sized corporations, and to continuously discover future growth engines,” said Hak Cheol Shin, CEO of LG Chem, in a statement.
Petrochemicals are the biggest contributor to LG Chem’s KRW30.1 trillion in revenue, followed by advanced material and life sciences. Advanced materials encompass components for EV batteries as well as materials used in OLEDs and semiconductors. It is a priority area for LG Chem, which wants to recruit hundreds of new staff for battery materials alone and increase cathode output capacity sixfold by 2026.
Last year, LG Energy Solution was formed through a spinout from LG Chem. It produces batteries for EVs, smart devices, and energy storage systems, and develops battery reuse and recycling systems.
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