Korean LPs receive massive capital calls from global funds
By Apr 02, 2020 (Gmt+09:00)
S.Korea's LS Materials set to boost earnings ahead of IPO process
Macquarie eyes its 1st Korean data center valued around $722 mn
Galaxy Ring, new foldables set to steal the show at Samsung Unpacked Paris
SK Inc. in talks to sell Pharmteco’s US CDMO plant to Novo Nordisk
POSCO gears up for carbon-free steelmaking with hydrogen
To meet the massive capital calls from private equity funds to real estate and infrastructure investment funds, the Korean limited partners are required to attend a series of conference calls and prepare the paperwork, according to investment banking sources on April 2.
Previously, alternative investment firms in general had made capital calls in two or three installments and used low-interest bridge loans from banks before closing a fund to boost internal rates of returns.
After the coronavirus pandemic forced banks to tighten credit, investment firms are returning to their LPs to cover the acquisition price.
The prospect of a reduction in the deal volume also spurred the increase in capital calls as investment companies sought to avoid a rise in unspent cash, or dry powder, said the sources who declined to give further details.
Meanwhile, domestic investment divisions of the pension schemes are struggling with the increased amount of uncommitted capital as they put on hold almost all new investments.
They are unlikely to put up new capital for domestic private equity funds anytime soon, given the policy efforts focused on supporting small businesses and decreased financing from financial institutions, the sources said.
Write to Dong-hun Lee at leedh@hankyung.com
Yeonhee Kim edited this article
-
Pension fundsKorea’s military fund taps ex-president of Woori Financial as CIO
Jun 28, 2024 (Gmt+09:00)
-
Pension fundsKorea's NPS CIO talks with GPIF, GIC execs on asset allocation
Jun 24, 2024 (Gmt+09:00)
-
Foreign exchangeKorea FX authorities, NPS raise currency swap limit to $50 bn
Jun 21, 2024 (Gmt+09:00)
-
Private equityAffirma Capital seeks to sell entire stake in both SeAH FS, S&G Holdings
Jun 20, 2024 (Gmt+09:00)