Private equity funds in S. Korea raise record amount of money in 2015

Private equity fund (PEF) managers in South Korea raised the largest yearly money from clients in 2015, topping the landmark 10 trillion-won (870 million U.S. dollars) level, financial watchdog data showed on Monday.

Newly registered PEFs raised fresh funds worth 10.2 trillion won in 2015, surpassing 10 trillion won for the first time since it was introduced in 2004, according to the Financial Supervisory Service (FSS).

Top two managers accounted for about one-third of the total fund-raising, with MBK Partners raising 2.34 trillion won and IMM Private Equity gaining 1.14 trillion won respectively.

Private equity funds are a collective investment scheme, which raises funds from a small number of high net-worth investors, both individual and institutional. The equity capital, which is not quoted on a public exchange, invests into private companies or buys out public companies that usually result in a delisting.

The number of newly established PEFs in South Korea reached a record yearly high of 76 in 2015.

The PEF investment gained popularity as the financial regulator boosted the PEF market to diversify investment tools and provide funds for companies more smoothly.

The PEF market is expected to grow fast as the government pushes for corporate restructuring process that will increase the number of companies for sale later this year.

Meanwhile, loans borrowed by PEFs stood at 10.3 trillion won as of end-2015, up 33.8 percent from a year earlier. Enditem