The newly installed president of spin-out KTB Private Equity aims to increase collaboration with foreign fund partners and explore more overseas deal-sourcing opportunities in future.
At present foreign-related PE deals make up about 10% of the firm’s $2.1 billion in committed capital, but Kevin Kwon tells AsianInvestor he wants this to rise in percentage terms.
“We will expand [overseas funding] more significantly and will make an effort to work with reputable foreign PE entities for opportunities,” he stresses. “We will be proactive on this.
“We plan to expand the company’s limited partner base to meet growing demand in connection with rising investment opportunities in Asia.”
Kwon joined KTB Private Equity this March after predecessor Usuk Ko quit. Previously Kwon was CIO of South Korea’s $7 billion Government Employees Pension Service (GEPS) until leaving in January. He was replaced by Yoo Seung Rok, as reported.
KTB Private Equity was established in 1981 under a different name – the Korea Technology Development Corporation – as the Korean government’s first venture capital firm. Until recently it operated as a unit of KTB Securities, but just last month was spun out into an independent subsidiary under the KTB Financial Group umbrella.
“We wanted to make sure there would be no conflicts of interest between the private equity fund management and the unit in the same company that raises capital,” says Kwon on the rationale for a spin-off.
KTB Private Equity has $1.5 billion in total AUM, raised from more than 40 limited partners domestically, with notable names including the Korea Finance Corporation, GEPS, Military Mutual Aid Association, Korea Post and the Korea Teachers Pension Fund.
It ranks fifth in AUM terms among 10 active Korean PE funds registered with the Financial Supervisory Service, behind those run by Korea Development Bank ($5 billion), MBK, Mirae Asset Maps (which merged with Mirae Asset Global Investments this March) and Macquarie. The others are Vogo, IBK, IMM, Woori and Hahn & Company.
Overall KTB Private Equity manages nine PE funds, of which seven target domestic markets. Of the two overseas funds, one targets China and the other the Asia region as a whole. Its China KTB Platinum PEF was set up in 2010 and has $90 million, while the regional Asia Clean Energy fund was set up in 2009 and has $62 million.
Most recently KTB Private Equity invested $8 million into China-based IC substrate manufacturer Access, while other overseas transactions include Focus Media, Xue Er Si, China Paradise, Sonus, Copper Network and Xylan, amongst others.
Kwon confirms that KTB Private Equity is eager to raise capital from the Asian Development Bank as well as Korean investors, while he says the firm plans to raise an energy/natural resources fund targeting the Asia region, specifically China, India, Thailand, Malaysia and Indonesia.
Prior to his GEPS role Kwon ran the business trust division of Citibank Korea, with responsibility for up to $50 billion in assets. He had been working at Hanmi Bank before it was taken over by Citibank in 2004.