The number of management participation-type private equity funds (PEFs) surpassed 600 this year, with total capital commitments exceeding 80 trillion won (US$67.06 billion).
The number of PEFs stood at 636 as of the end of June this year, up 53 from 583 at the end of last year, according to the Financial Supervisory Service (FSS) on Sept. 9. The figure increased 526, or 478.2 percent, from 110 at the end of 2009.
The number of PEFs gradually rose from 316 at the end of 2015 to 383 at the end of 2016 and 444 at the end of 2017 and then surged to 583 at the end of 2018. The amount of capital commitments came to 80.90 trillion won (US$67.81 billion) as of the end of June this year, up 6.40 trillion won (US$5.36 billion) at the end of December last year.
The figure rose rapidly from 20 trillion won (US$16.76 billion) at the end of 2009 to 58.50 trillion won (US$49.04 billion) at the end of 2015 and then the rate of increase slowed for a while from 62.20 trillion won (US$52.14 billion) at the end of 2016 to 62.60 trillion won (US$52.47 billion) at the end of 2017. However, the figure skyrocketed to 74.50 trillion won (US$62.45 billion) at the end of last year and continued to have a similar growth rate this year.
Capital commitment is the amount of capital that investors have promised general partners (GP) of asset management companies to invest in PEFs. There can be a gap with the actual amount of investment in PEFs by investors.
In fact, the commitment amount stood at 74.50 trillion won (US$62.45 billion) as of the end of last year, while the actually executed amount came to 55.70 trillion won (US$46.69 billion). In short, the rate of execution was 74.8 percent.
Among GPs, MBK Partners ranked first in terms of capital commitments with 9.71 trillion won (US$8.14 billion) as of the end of June. It currently manages 17 PEFs.
Korea Corporate Governance Improvement (KCGI), which attracted attention by declaring to intervene in management of Hanjin KAL Corp. last year, manages seven PEFs and its capital commitments totaled 320.40 billion won (US$268.57 million).
The number of large PEFs with more than 300 billion won (US$251.47 million) of commitments was 60 as of the end of June this year, accounting for 9.4 percent of the total, while that of medium-sized PEFs and small PEFs with less than 100 billion won (US$83.82 million) of commitment amount was 158 and 418, respectively, taking up 24.8 percent and 65.7 percent.
“KD Value No. 6” managed by the Korea Development Bank (KDB) has the largest capital commitment of 2.75 trillion won (US$2.31 billion) and “Keystone Technology Financing No. 2” managed by Keystone Private Equity has the smallest commitment of 500 million won (US$41.91 million).