Hahn & Co reaches $1.9b first close on fourth Korea fund
South Korean private equity firm Hahn & Co has reached a first close of USD 1.9bn on its fourth flagship buyout fund against an overall target of USD 3.25bn.
The vehicle launched in October – although the data room opened several months earlier – and the first close came in May, a source close to the situation told Mergermarket, AVCJ's sister title. A US regulatory filing for Hahn & Co IV was made in December 2022.
The first close included a significant number of re-ups from limited partners in the firm’s previous funds, with some investors committing larger sums than in the previous vintage, the source said. Hahn & Co declined to comment on fundraising.
The Fund IV strategy is largely the same as that of its predecessors – control transactions across the consumer, industrial, transportation and logistics, and hospitality and entertainment sectors. Corporate carve-outs are expected to remain a prevalent theme.
The new fund is also structured much like its predecessor, with a pool of core equity – captured in the USD 3.25bn target – plus a co-investment sidecar that allows Hahn & Co to flex up for larger deals. The same LPs feature in both vehicles on a pro rata basis.
In addition, Hahn & Co raises separate co-investment vehicles for specific transactions. The source confirmed there would be a co-investment sidecar but said the size has yet to be determined.
Hahn & Co closed Fund III on USD 3.2bn in 2019, comprising USD 2.7bn in core equity, a sidecar, plus a USD 500m co-investment fund that would increase in size as required, according to AVCJ. Total capital committed during the Fund III cycle, as of mid-2022, was nearly USD 4bn across fund investment and co-investment.
Recent investment activity by Hahn & Co includes the acquisition of the industrial materials division of SKC for KRW 1.6trn (USD 1.27bn). Earlier this month, the firm launched a KRW 957bn tender offer for medical devices manufacturer Lutronic, having agreed to acquire a 19.33% interest from the chairman and CEO.
Last year, Hahn & Co completed Asia’s largest GP-led secondary transaction to date, raising a USD 1.5bn single asset continuation fund for cement maker-turned-environmental services player Ssangyong C&E. Secondary investors contributed around USD 1bn with the rest coming from GP and from existing LPs rolling over their interests.
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