NPS, Korea Post back JKL Partners' $687 mn PE fund

South Korea's JKL Partners has closed a 750 billion won ($687 million) private equity fund, backed by the National Pension Service, Korea Development Bank and Korea Post, according to a local media report on Dec. 14.

The fifth fund of the PE firm will target traditional manufacturers in Korea for buyout deals, with a view to driving their digital transformation and enhancing corporate value. JKL plans to employ cloud computing, big data and 5G to help brick-and-mortar companies align with the fast-changing management environment.

The 750-billion-won fund drew 160 billion won from the NPS; 135 billion won from state-run KDB; and 100 billion won from Korea Post this year.

It was first reported by the Maeil Business Newspaper.

The fund will also invest in scale-up unicorn companies armed with a competitive edge in fintech, artificial intelligence and contactless services, nurturing them to become key players in the innovative industrial era.

Industry watchers are paying close attention to JKL Partners' portfolio for the latest fund as the PE firm has played a significant role in revamping numerous companies.

A leading example is when the firm and Harim Group, a domestic livestock feed company, jointly acquired the management rights of debt-laden bulk carrier Pan Ocean Co. for 1 trillion won ($916 million) in 2015.

Under JKL Partners' consortium, Pan Ocean, which had filed for court receivership in 2013, eventually became the largest bulk carrier service in the country, posting over 200 billion won in annual operating profits.

Another example is Lotte Non-Life Insurance Co., which received 750 billion won from JKL Partners last year. Since then, the company has seen its performance soar after restructuring and improving internal management.

In the first three quarters of this year, Lotte Non-Life Insurance's operating profits jumped by 117% to 97.8 billion won ($90 million) between January and September of this year, compared to the 45 billion won posted in the year-earlier period.

Founded in 2001, JKL Partners has committed to a one-fund strategy that focuses on creating and operating a single fund. The PE firm is one of the first to complete its fund among major Korean PE firms that began fundraising this year.

The PE firm plans to concentrate on the No. 5 blind pool fund with no further fundraising plans for next year.

Currently, JKL Partners has about 2.5 trillion won in assets under management with an 18.2% internal rate of return from liquidated funds.

Danbee Lee edited this article.