Korea’s Castling gets first LP commitment, targets fund-of-funds
Castling Investment Group, a start-up alternatives investment advisory firm based in South Korea, has received its first external LP commitment – totaling $80 million – from a local museum foundation. The capital will be placed into a separate account and deployed globally.
"We want to take this commitment and go to market next year for a co-mingled fund-of-funds," said Steve J. Kim, Castling's chief investment officer, told AVCJ.
The firm was set up by a local family office that previously had exposure to real estate but not private equity. When it decided to access the asset class the family office opted for an investment advisory-style model, which would deliver returns on fund investments plus management fee revenue. The museum foundation commitment was secured via the family's network.
Kim joined the firm earlier this year and is now building out the investment platform. He previously worked for Pathway Capital Management, taking responsibility for Asia-related due diligence and establishing the firm's Hong Kong office in 2012.
The Castling team currently has 10 members, eight of whom are focused on investments. They will channel the initial capital into up to three investments per year - primarily private equity funds but hedge funds and other alternatives vehicles may also be considered. The strategy is sector-agnostic and region-agnostic. Equity checks will be $5-20 million.
As for Castling's future fundraising plans, the firm will offer customized separate accounts and co-mingled vehicles, targeting Asian institutional investors. The Korean institutional base has become popular with private equity firms globally, and Kim notes that the country is under-allocated to the asset class compared to other developed economies.
He also sees Castling's approach as distinct from the leading international fund-of-funds in the market. "The difference between them and us is they are elephant-hunting - going for the National Pension Service of Korea and Korea Investment Corporation. We are targeting the assets people don't really know about - the middle market in Korea."
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