Nearly 200 new management participation-type private equity funds (PEFs) were set up last year, attracting 16.40 trillion won (US$13.92 billion) in fresh funds, the largest amount ever, the Financial Supervisory Service said on May 10. In particular, startup and venture PEFs nearly tripled from 2017 in terms of the fund number and investment amount.
The Financial Supervisory Service (FSS) announced on May 10 that a total of 198 management participation-type PEFs were set up last year, up 63, or 46.6 percent, from 135 in the previous year. It was a new record.
These newly established funds attracted 16.40 trillion won of fresh funds, an all-time high and an increase of 65.6 percent, or 6.50 trillion won (US$5.52 billion), from 9.90 trillion won (US$8.40 billion) a year ago.
Notably, the number of PEFs specializing in startups and venture companies tripled from 9 to 27 last year, while the amount of funds they raised increased by 3.4 times to 441.70 billion won (US$374.96 million) from 129.80 billion won (US$110.19 million) a year earlier.
The number of new PEFs which raised less than 100 billion won (US$84.90 million) stood at 152, accounting for 76.8 percent of the total, while that of mid-sized PEFs between 100 billion won (US$84.90 million) and 300 billion won (US$254.67 million) and large sized PEFs with over 300 billion won (US$254.67 million) were 33 and 13, respectively, taking up 16.7 percent and 6.6 percent.
The number of PEFs which were under operation as of the end of last year grew by 5.3 times to 583 from 110 in 2009 when the Capital Market Act went into effect. The amount of investments executed by PEFs came to 13.90 trillion won (US$11.80 billion) last year, surpassing the annual average of 11.40 trillion won (US$9.68 billion) from 2015 to 2017. The increase is attributed to a considerable number of large investments made by PEFs last year, including the 1.50 trillion won (US$1.27 billion) in SK Shipping, 570.40 billion won (US$484.21 million) in ADT Caps and 500 billion won (US$424.45 million) in 11 Street. Out of the 410 companies where PEFs invested, 357 were domestic companies, accounting for 87.1 percent, while 53 of them were foreign ones, taking up 12.9 percent.
The amount of divestment from PEFs came to 9 trillion won (US$7.64 billion) last year, up 21.6 percent from 7.40 trillion won (US$6.28 billion) in 2017. The figure also represented a new record. The number of dissolved PEFs was 55, down 9 from a year ago.
The FSS expects that PEFs will continue to show growth as the government will continue to ease regulations and expand the supply of policy funds.