MBK closes Asia's 3rd biggest buyout fund at $6.5 bn

MBK Partners held the final close of its fifth buyout fund at $6.5 billion on May 20, which marked the third-biggest fundraising for an Asia-focused private equity fund up to date.

The new fund received commitments from about 50 investors from abroad and South Korea during a period of just six months, showing little impact from the coronavirus pandemic, according to investment banking sources on May 21.

Its South Korean limited partners include the National Pension Service, the Public Officials Benefit Association, the Teachers’ Pension and Korean Reinsurance.

The fifth buyout fund for the Seoul-based firm is the third largest investment vehicle in Asia, after Hillhouse Capital’s $10.6 billion fund raised in 2018 and KKR’s $9.3 billion fund launch in 2017.

 

The fundraising came after MBK raised $4.1 billion for its fourth buyout fund in 2016 that posted an internal rate of return of 33.8% at the end of 2019, according to its 2019 annual letter.

MBK is the largest independent private equity manager in Asia, with $22.5 billion in assets under management.

Its strong track records in 2019 include the full exits from water purifier rental company Coway Co. Ltd., Orange Life Insurance Co. Ltd. and Daesung Industrial Gases Co. Ltd. The three exits yielded an average IRR of over 25%.

Last year, it secured $3.5 billion in proceeds from exits and dividend incomes and through recapitalizations of companies it had invested in.

Separately, MBK is looking to launch its second special situations fund in the second half of this year for an undisclosed sum to capitalize on increased market uncertainties triggered by the Covid-19.

Write to Chang Jae Yoo at yoocool@hankyung.com