Partners Group attracts Korea Post and local insurers to PE funds

Some major South Korean institutional investors have committed to Switzerland-headquartered global asset manager Partners Group's Secondary 2020 Fund VII, which is targeting $4 billion, sources with knowledge of the matter told The Korea Economic Daily.

The sources said Korean postal service agency Korea Post has made a $100 million commitment to the secondary private equity fund, following its previous investments in the asset manager’s vintage secondary funds in 2008 and 2011. Four other Korean investors including KB Insurance Co. and Hana Financial Investment Co. have newly participated in the fund with a combined $150 million commitment, said the sources. With some other Korean investors considering participation, the fund has a $3 billion aggregate commitment and is expected to announce the final closing at the end of the first quarter in 2022, The Korea Economic Daily understood.

Partners Group’s fourth private equity buyout program, which closed at $15 billion in September of this year, also received more than a $300 million commitment from five Korean limited partners including KB Insurance Co. and DB Insurance Co., the sources said.  

The program was anchored by Partners Group’s fourth flagship direct equity fund, which has raised $6 billion and includes another $9 billion committed via other private markets programs and client solutions. More than 70% of the aggregate commitment has been allocated to around 20 companies in Partners Group’s portfolio as of end-September, while the asset manager is preparing to launch its fifth private equity buyout program next year, Partners Group’s Korean office head Tae E. Ahn said.

Partners Group has more than 20 years of expertise in secondaries as well as buyout fund and buyout fund of funds (FoF) portfolio management, and this strength has allowed it to more quickly boost its presence in Korea than its competitors, Ahn said. Although buyout fund investment has been active mainly in the US and Europe, it is increasing in the Asia-Pacific secondaries market, he added.

For its investment strategy, the asset manager selects high-potential sectors such as digitization, new living and zero-carbon, defines around 60 investment themes in the sectors and seeks out companies that will outperform and create added value, the Korean office head explained. In the digitization sector, Partners Group and Canada Pension Plan Investment Board jointly acquired a 45% stake in digital engineering service GlobalLogic and sold it to Japanese conglomerate Hitachi Ltd in March, with a more than 70% internal rate of return. For investment in new living, such as heating, ventilation and air conditioning (HVAC) and pet industries, the asset manager has invested in US building controls company Reedy Industries and US veterinary hospital operator Blue River Pet Care.

With $119 billion assets under management as of end-June, Partners Group has invested $150 billion since its inception in 1996. Operating 20 offices worldwide, it invests in about 1,400 funds of funds managed by 900 global asset managers.

Write to Jihyun Kim at snowy@hankyung.com
Jennifer Nicholson-Breen edited this article.