The W95 trillion ($90 billion) Korea Federation of Community Credit Cooperatives, one of the country’s biggest institutional investors, has aligned itself with local private-equity firm MBK Partners in a bid to acquire Woori Financial Group.

Jeung Jae-ho, managing director and head of KFCC’s fund-management division, says the firm is working with MBK and other partners in submitting a formal bid to the Ministry of Strategy and Finance that is due on August 17.

The $150 billion Canada Pension Plan Investment Board is also working with MBK to help finance the proposed acquisition, say people familiar with the deal, but CPPIB officials involved could not be reached for comment by press time.

MBK is one of three private-equity funds, along with Vogo and T-Stone, expected to submit bids to acquire the government’s controlling 57% stake in Woori, valued at $6 billion based on Friday's share price.

Jeung joined KFCC last year to run its investment operations, but he is an investment banker by background, having worked at BNP Paribas and Shinhan Financial Securities.

He says MBK partner Michael Kim had once sought to partner with KFCC to acquire Korea Exchange Bank in the mid-2000s. Although that bid didn’t go far, it prompted Kim to suggest to KFCC that it provide most of the cash for the Woori acquisition. Kim declined to comment.

Jeung pushed the idea internally, and management supported it.

The finance ministry will review the PE fund bids with an eye to advancing two pitches to a final round of due diligence, with a winner to be announced by September, at which point they would enter negotiations with the government.

The government could decide not to accept any of the bids from private-equity funds, notes Jeung. That may be why MBK was keen to bring on board a local anchor institution – although the market had long speculated that another top-tier name such as Shinhan or Kookmin was more likely.

Jeung acknowledges that KFCC is not a top-tier bank. On the contrary, it is a collection of local cooperatives that lend to lower-income individuals. But that, he says, is why KFCC should be viewed as a good fit: only KFCC would combine its large, low-income businesses with a top-tier financial group serving wealthier clients.

There’s more to KFCC’s bid than math, however.

“We want to acquire Woori as a matter of self-confidence,” Jeung says. “We have lots of money and assets, but we don’t get recognised as an important financial institution. If we acquire Woori, we can feel pride.”

He says KFCC has plenty of cash ready to be deployed and would look to invest in at least 30% of Woori, which would cost around W4 trillion. However Jeung says KFCC is not looking to get involved directly in management of the bank. “We’d just be a stockholder,” he says.

It is not known whether Vogo or T-Stone have lined up Korean financial institutions to support their own bids.