Hellman & Friedman set to gather $500 mn from Korea

San Francisco-based private equity firm Hellman & Friedman (H&F) is expected to gather $500 million from South Korea's three key investors -- the National Pension Service (NPS), the Korea Investment Corporation (KIC) and the Korean Teachers' Credit Union (KTCU) -- for its new blind pool fund targeting $22 billion at its final close.

The KTCU, a $30 billion retirement fund, allocated $100 million to the US PEF's 10th fund, with the NPS and the KIC considering committing $200 million each,  according to sources with knowledge of the matter on Mar. 29.

That would mark the first commitment by both the NPS and the KTCU to H&F's funds. For the KIC, the sovereign wealth fund first participated as a limited partner (LP) in H&F's ninth fund that raised its then biggest-ever amount of $16.5 billion in 2018. 

The NPS and the KIC declined to comment on the capital commitment, first reported by the Maeil Business Newspaper. 

Since its inception in 1984, H&F has raised over $50 billion of committed capital and invested in over 90 companies with a focus on large-scale investments in high-quality, growing businesses in developed markets. 

It is one of the top-performing buyout firms, with its recently liquidated fourth and fifth funds returning 49% and 37%, respectively, according to the daily newspaper. The gross internal rate of return of its nine buyout funds, or the total rate of their return before fees, averaged 30%.  

Over 90% of H&F's existing LPs have re-upped with its funds, leaving new LPs to compete for the remaining slices. The latest fund will reportedly pursue 15 investment deals in North America and Europe, with a focus on internet, media, financial services, software and healthcare.

H&F's 2020 investments include AutoScout24, a European online marketplace for cars and a minority stake in Action, a non-food discount retailer in Europe.

Its 2014 investment in Grocery Outlet generated over a five times multiple on its invested capital, the newspaper said. Last year, it fully exited the US retailer following the latter's initial public offering on the Nasdaq. 

Write to Jun-ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article.