Korean private equity enters Southeast Asia after joining IPEF


South Korean private equity fund (PEF) operators who are actively diversifying their investment target industries and markets are raising hopes of greater opportunities with the launch of the US-led Indo-Pacific Economic Framework (IPEF). United, which has officially started.

South Korea joined the inaugural 13 members of the new regional trade order based on four pillars – supply chain resilience, clean energy, decarbonization, infrastructure and taxation – largely to contain the Chinese influence on the region.

Korean FFPs that have actively invested in Southeast Asian countries can benefit from the expected increase in US-led investments in economies that account for 40% of global gross domestic product. In addition to Korea and the United States, members are Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, and Thailand.

STIC Investment commands a large portfolio of IPEF countries in the Southeast Asia region. Since establishing its first Southeast Asia office in Ho Chi Minh City in 2008, STIC has steadily increased the number of its offices in the region.

In 2020, it invested around $200 million in Singapore’s ride-sharing and delivery app Grab, Uber’s version for Southeast Asia. STIC has also invested $10 million in Indian delivery service Dunzo and the country’s largest hospital chain, Sahyadri. Together with Naver Corp., STIC has invested $33 million in Indonesian online grocery platform HappyFresh. Its headquarters in Seoul has also actively spearheaded recent investments in the region.

IMM Investment is expanding its presence in the IPEF region in partnership with Korean conglomerates. It set up COPA fund, an overseas M&A private equity fund, worth $400 million with Daewoo E&C in March to jointly invest in promising areas such as cold chain. In Vietnam. IMM Investment currently plans to launch a $500 million COPA fund with SK ecoplant in the first half of this year to invest in Tes, the leading e-waste disposal and recycling company. (e-waste) of Singapore.

Affirma Capital, with private equity operations in six different regions including Korea, India, Southeast Asia, the Middle East, China and Africa, led investments in various small financial companies in India. It also recently invested 90 billion won ($71.37 million) in Beam Mobility, becoming the second largest shareholder.

Korean PEFs have actively sought to diversify their investment targets and markets.

In 2018, SJL Partners teamed up with KCC and the Wonik Group to invest $3 billion in US silicone maker Momentive Performance Materials. ACE Equity Partners, KAMUR Partners and Cerritos Holdings formed a consortium last year to buy a 20% stake in Australian Strategic Materials (ASM), an emerging producer of critical metals.

With the official launch of IPEF, Korean PEFs with a track record of investing in IPEF countries are expected to accelerate their inroads into these countries as part of their efforts to reduce dependence on China where regulatory risk is high as the US-China trade war persists. as a threat to their business.

IPEF’s initial partners are Australia, Brunei, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam, which together account for 40% of global GDP, according to the statement released by the White House. .

By Park Chang-young and Susan Lee

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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