The financial district of Yeouido in Seoul. (Yonhap)
SEOUL, Sept. 2 (Korea Bizwire) — Private equity funds (PEFs) are gaining a strong presence in South Korea as they work as solutions for problems among large conglomerates to evading monopoly restrictions during the transition of management and changing management structure.
London-based investment data company Preqin reported that major private placement funds’ assets under management (AUM) stood at US$171 billion as of late last year, up 27 percent from 2020 and 69 percent from 2019.
The report attributed the growth of South Korea’s PEFs to the growth of buyout PEFs and venture capitals.
They account for 39 percent of all AUM, which is three times the size of the average proportion in the Asia-Pacific region (13 percent).
Only last year, $16 billion was exchanged for buyouts. Early this year, an $11 billion transaction took place for buyouts.
Preqin said buyout PEFs work as a ‘solution’ among South Korean companies.
Families that run large conglomerates use buyout PEFs to avoid fines arising from anti-monopoly restrictions and take down non-essential assets to focus on future profits from the energy and artificial intelligence (AI) sectors.
H. M. Kang (hmkang@koreabizwire.com)
