Premier Partners, Praxis Capital lead 2024 Korea PE fundraising

Premier Partners and Praxis Capital are on track to raise 1 trillion won ($680 million) in their respective funds after the two South Korean private equity firms swept the beauty contests to attract major Korean pension funds in 2024.

The two investment firms each manage about $1 billion in assets and focus on growth capital strategies. With strong track records, they outmaneuvered MBK Partners, with $30 billion in assets under management, in multiple competitions to win over leading Korean asset owners.

Eleven major institutional investors in Korea committed a total of 2.79 trillion won ($1.9 billion) to South Korea-based, large- and medium-sized private equity funds in 2024, excluding credit and small-cap strategies funds.

They include the National Pension Service (NPS), Government Employees Pension Service (GEPS), Korea Scientists and Engineers Mutual-Aid Association (SEMA), Military Mutual Aid Association (MMAA), Korea Development Bank (KDB) and Export Import Bank of Korea (KEXIM).

MG Community Credit Cooperatives, Korea Post, the Korea Federation of SMEs (KBIZ), the Pension Foundation of the Presbyterian Church of Korea and the radioactive waste management fund under the Ministry of Trade, Industry and Energy also committed to those funds in 2024.

Private equity firm's name	Major Korean limited partners in 2024	Target fund size
Premier Partners	NPS, KDB, KEXIM, SEMA and four others	More than 1 trillion won
Praxis Capital	NPS, GEPS, MG Community, MMAA and three others	800 billion-1 trillion won
JKL Partners	NPS, KDB, MG Community and KBIZ	800 billion won
MBK Partners	NPS, GEPS, Radioactive Waste Management Fund	$7 billion
(Source: Premier Partners, Praxis Capital, JKL Partners and MBK Partners)

Premier Partners, which specializes in venture capital and growth capital, reaped juicy returns from minority stake investments in SK IE Technology Co. (SKIET) and three-dimensional dental scanner maker Medit Corp.

Praxis Capital Partners, founded in 2013, logged a 26% internal rate of return from the sale of BusinessOn Communication Co., a digital tax invoice provider, to SkyLake Equity Partners.

Praxis focuses on middle-market buyouts and growth capital investments in Korea.

It notched handsome returns from Doosan Robotics Inc., a collaborative robot manufacturer, equivalent to 6.5 times its investment in just two years.

JKL Partners also stood out among Korean PE firms. After winning commitments from the NPS as well as KDB, it seeks to raise 800 billion won in a mid-cap strategy fund. 

MBK PARTNERS

North Asia-focused MBK Partners got off to a roaring start in 2024 with new funding from the NPS.

But it failed to attract new commitments from other major Korean limited partners after announcing a hostile takeover bid for Korea Zinc Inc.

However, it is poised to wrest control of the world's No. 1 zinc smelter, which would mark the first unfriendly acquisition of a domestic company.

In November, MBK said it had raised $5 billion at the second close of its new buyout fund that targets $7 billion at the final close.

Armed with new money, the three Seoul-based PE firms and MBK are expected to lead Korea’s M&A market over the next few years, as buyout firms tend to deploy 70-80% of their funds within the first two to three years after fundraising.

By comparison, VIG Partners, a first-generation homegrown PE house, lagged behind its local peers in the fundraising race. For the second straight year in 2024, it failed to win an NPS mandate.

Centroid Investment Partners and E&F Private Equity also performed poorly in 2024 fundraising.

Write to Jong-Kwan Park and Ji-Eun Ha at pjk@hankyung.com
Yeonhee Kim edited this article.