MBK Partners Seeks Up to $6.5 Billion for Fifth Fund

One of the largest homegrown Asian private equity firms is marketing a new buyout fund to invest in Korea, Japan and China.

One of the largest homegrown Asian private equity firms is marketing a new buyout fund to invest in Korea, Japan and China.

MBK Partners, a buyout firm led by a former Asia dealmaker for Carlyle Group, is aiming to raise its largest fund ever.

The Seoul-based firm set a $6.5bn hard cap for MBK Partners Fund V, according to a public document from the New Jersey State Investment Council, a public pension manager.

The firm’s previous fund, a 2017-vintage vehicle, closed with $4.1bn, according to news reports at the time.

MBK Partners didn’t respond to a request for comment.

Fundraising for Asia-focused private equity funds has heated up in recent months after experiencing a slow start to the year. Fifty nine Asia-focused funds closed on a total of $40bn in the third quarter of this year, surpassing the $38bn raised in the first half of 2019, according to data tracker Preqin.

MBK Partners was co-founded in 2005 by Michael ByungJu Kim, who had led Carlyle’s buyout activity in Asia outside of Japan as president of Carlyle Asia Partners. Before that, he was an investment banker for Salomon Smith Barney and Goldman Sachs Group.

The new fund will aim to invest across north Asia, focusing on Korea, Japan and China, according to the pension document. It will look to invest through management-led buyouts, corporate divestitures, industry roll ups and other strategies.

The firm has particular experience with large, complex deals, especially in heavily regulated industries such as financial services, telecommunications and media, according to a memo included with the pension document.
Investments made by MBK Partners this year include Shanghai-based car rental company eHi Car Services and Tokyo-based chocolate brand Godiva Japan, according to the firm’s website.

The firm’s strategy has earned it strong returns, based on information in the New Jersey pension document. Its three most recent funds from newest to oldest have produced net internal rates of return of 18.2%, 16.9% and 19.4%, the document states, based on information from advisory firm TorreyCove Capital Partners.

In addition, the fund will have a general-partner commitment level of 2.75%, the New Jersey document states.

The New Jersey State Investment Council approved a commitment to the fund of up to $100m on Wednesday, a pension spokeswoman said.

Source: Wall Street Journal

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