Carlyle tops NPS' favorite PE managers as of end-2021

The Carlyle Group was the most preferred fund manager hired by South Korea’s National Pension Service (NPS) as of end-2021, according to NPS’ disclosure on Aug. 12. The world’s third-largest pension fund with 916.2 trillion won ($699.9 billion) of AUM made efforts in diversification, betting on more private equity funds focused on certain sectors or regions last year. 

The pension giant injected capital in 404 domestic and overseas PE funds as of end-2021, up 55 from end-2020. It had committed a combined 84.6 trillion won and invested 52.6 trillion won by last year, respectively up 27% and 34% from 2020.

The pension fund didn’t disclose the investment size in each fund in the announcement. It also excluded the funds which haven’t made capital calls yet.

CARLYLE, BLACKSTONE, ICG

Carlyle topped NPS’ favorite PE managers – the pension fund has invested in 14 funds of the US asset management giant. Among the funds are Carlyle Europe Partners VI, a buyout fund targeting to collect €7.5 billion ($7.6 billion), and Carlyle Global Partners II, a 2020 vintage buyout fund with $1.84 billion.

Blackstone Inc. was the Korean pension fund’s second-preferred PE manager. NPS has invested in Blackstone’s 12 funds including Blackstone Growth Fund, a growth equity vehicle that closed at $4.5 billion in 2021, and Blackstone Core Equity Partners II, a 2020 vintage buyout fund with $8 billion.

Intermediate Capital Group plc (ICG), a UK-based alternative asset management giant, was the third-preferred choice of NPS.

The Korean pension fund has bet on eight funds managed by ICG, including its eighth European Corporate Fund (Europe VIII), which closed at €8.1 billion in August 2022.  NPS has also invested in Europe V, VI and VII, as well as ICG’s debt funds.    

NPS hasn’t disclosed its investment details on KKR & Co.’s funds since last year. As of 2020, the pension fund had invested in nine funds of the US investment firm.

FLAGSHIP FUNDS OF GLOBAL INVESTORS

NPS’ other choices include BC Partners LLP, in which NPS acquired a stake last year, TPG Inc. and Ares Management Corp. The pension fund has invested six to seven funds managed by each firm.

NPS has also invested in some global investors’ flagship funds in recent years. Such funds include CVC Capital Partners Ltd.’s €21 billion buyout fund that closed in 2020, Hellman & Friedman LLC’s 10th fund that amassed $24.4 billion in 2021 and GI Partners LLC’s $3.9 billion funds that closed last year.

The Korean pension fund also joined investors of a €21.4 billion fund of Strategic Partners, the secondary market-focused investment unit of Blackstone. It also invested in Genstar Capital LLC’s flagship Fund X and affiliated opportunities fund with $11.7 billion that closed last year.

EXPANDING INVESTMENT IN EUROPE, DEBT FUNDS

NPS has recently bolstered the diversification of sectors, regions and tranches.

It joined a $17.8 billion fund in late 2020 created by Thoma Bravo L.P., a software and tech-specialized PE firm. The Korean pension fund invested in EQT IX last year, a €15.6 billion formed by Swedish PE giant EQT Partners AB, and Ares Management’s Ares Capital Europe V, a $13.2 billion European direct lending fund that closed in 2021.

NPS expanded investment in debt funds, such as Antares Capital LP’s $3 billion senior secured loan fund in 2020 and HPS Investment Partners LLC’ fifth Specialty Loan Fund which closed at around $11.7 billion in 2021.

Only a few Korean investment firms received NPS’ choice. Last year, the pension fund invested some amount of capital in Affirma Capital’s 543.4 billion won in its flagship Ascenta fund series’ fifth one and Glenwood Private Equity’s second blind pool fund reaching 900 billion won.  

Write to Jun-Ho Cha at chacha@hankyung.com
Jihyun Kim edited this article.