NPS, KIC, other Korean LPs commit $551 mn to Cinven's fund

Global private equity firm Cinven Ltd. has attracted €550 million ($551.3 million) from South Korean institutional investors for its eighth flagship fund launched in March with a €12 billion target, according to investment banking sources on Monday.    

Key Korean investors include the National Pension Service (NPS) and sovereign wealth fund Korea Investment Corporation (KIC), which have committed €200 million and €150 million, respectively.

Samsung Asset Management Co., The Korean Teachers’ Credit Union (KTCU), Korean Federation of Community Credit Cooperatives (KFCC), Woori Bank and other investors have committed an aggregate €200 million, The Korea Economic Daily found.    

The Korean institutional investors will inject the capital via a fund managed by CrownRock Capital Management, a Seoul-based private investment firm. The Korean investors, except for KFCC and Woori Bank, invested in Cinven’s previous buyout funds.

Cinven has raised more than €10 billion for the eighth flagship fund, which aims for a 25% internal rate of return (IRR).    

Over the past decade, Cinven’s fifth, sixth and seventh flagship funds achieved an IRR of more than 23%. The Korean limited partners are understood to have committed to the €12 billion fund thanks to the previous funds’ track records and the eighth fund’s scheme, which aims to buy European private equities at low prices.

The European market has a relatively low inflation rate and a strong GDP growth rate, as well as the potential of increasing exports and operating profits driven by the weakening euro, a Korean institutional investor source said.   

Headquartered in London, Cinven is specialized in buyout deals across a broad range of sectors such as business services, consumer, industrial, financial services, healthcare and technology, media and telecom (TMT).

The investment firm allocates 43% of its total assets in the Americas, 35% in Europe, 13% in the Asia-Pacific and 10% in the Middle East. Focusing on bolt-on acquisitions and buy-and-build strategies, it increases the values of corporates and exits via sell-offs or IPOs.

One of the top European PE firms in terms of assets under management, Cinven has led some major deals in Europe.

In March, it signed an agreement with Germany’s Bayer Environmental Science Professional for $2.6 billion. In July 2020, Cinven and PE firm Advent International completed the acquisition of the elevator tech business of TK Elevator, formerly thyssenkrupp Elevator.

Write to Ji-Hye Min at spop@hankyung.com
Jihyun Kim edited this article.