Affirma targets Korea private debt, secondaries

The firm – known as Standard Chartered Private Equity (SCPE) until Intermediate Capital Group (ICG) backed a spinout from the bank in 2018 – is prioritising private debt, according to a source close to the situation. An investment professional has been recruited from Korea's National Pension System (NPS) to lead this business. Affirma declined to comment.

Secondaries will initially be addressed opportunistically. There are no immediate plans for a fund, rather the firm will raise capital on a deal-by-deal or project fund basis. It will focus on GP-led transactions, typically single and multi-asset continuation funds.

"Korea hasn't seen any secondary deals from a domestic perspective or anyone trying to do these deals. The team has experience with secondaries going back to the transactions with Coller Capital and Goldman Sachs and later with ICG. The conclusion was, ‘If we understand the space, and no one else is addressing the opportunity, why not do it?'," the source added.

Starting in 2013, Standard Chartered embarked on a two-year process that saw more than 40 positions worth USD 2.3bn spun out into four new limited partnerships backed by secondary investors. The SCPE team retained management responsibilities. The subsequent ICG-backed transaction took out most of the bank's remaining balance sheet assets.

Several Korean GPs have established private debt businesses in the wake of a regulatory reform that allows fund managers to operate multiple business lines. IMM Private Equity's credit unit made its first investment last year and then launched a fund that makes sustainability-related investments. Meanwhile, VIG Partners recruited the head of Goldman Sachs' Korea special situations business.

Affirma has previously raised five Korea-focused funds, leveraging relationships with local LPs. Fund V closed last year with KRW 543bn (USD 473m) in commitments, more than twice the size of its 2016-vintage predecessor.

Unlike previous vintages, Fund V has a 30% Asia ex-Korea allocation. Affirma has been deploying this capital alongside the USD 400m in dry powder it secured from ICG as part of the spinout. The latter pool is now approximately three-quarters deployed.

The firm is also awaiting final regulatory approval on a renminbi-denominated China fund of USD 250m.

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• Topics
• North Asia
• Fundraising
• Credit
• Secondaries
• GPs
• South Korea
• Affirma Capital
• private debt
• Secondaries