Darby PE in Korea exit

The firm’s mezzanine fund has divested its holding in Leadcorp through a domestic IPO.

Darby Private Equity, the private equity arm of Franklin Templeton Investments, has exited its investment in Seoul-headquartered consumer finance business, Leadcorp, through an initial public offering in Korea, according to a company statement.

The investment was made from the firm’s Darby Asia Mezzanine Fund II, which first invested in Leadcorp in October 2007 in the form of senior secured notes and common shares to support the expansion of its consumer finance business.

The fund then made follow-on investments in the form of senior-secured notes issued by Leadcorp in October 2010 and December 2011.

Earlier this year, Leadcorp fully paid all senior secured notes issued to the fund. The business has now listed on the KOSDAQ Market of Korea Exchange, although no exit multiple was given by the firm.

“We are excited about the success of the Leadcorp investment, the fifth exit from the DAMF II portfolio. Leadcorp represents another example of the investment potential for growth capital for businesses in Asia,” David Hudson, senior managing director of Darby Asia, said in a statement.

Darby’s second Asia mezzanine fund was launched in 2005 and had $254 million in commitments through both equity and debt. The fund invests in high growth, mid-sized companies in Asia.

Mezzanine debt in Asia has attracted other private equity investors, too, with Korea and Japan key markets for funds.

In November, Nomura Holdings and Intermediate Capital Group partnered to raise a mezzanine debt fund focused on the Japanese market, Private Equity International reported earlier. Each firm committed JPY 10 billion (€73 million; $99 million) to the joint venture as an initial commitment.

“If you look at the mezzanine funds, we’ve seen a pickup in activity across all of our geographies [in Asia], which are Japan, South Korea, Greater China, Singapore, Australia and New Zealand,” managing director of ICG Chris Heine told PEI earlier.

Darby Private Equity was founded in 1994 by Nicholas Brady, former US secretary of state. In 2003, the firm became a fully-owned subsidiary of Franklin Templeton Investments. Franklin Templeton is a California-based company -based company and had more than $870 billion in assets under management as of 30 November 2013, according to the firm.