Korean private equity firm SkyLake Incuvest & Co. has partnered with computer networking giant Cisco and the Korean government to launch SkyLake Global Incuvest 4 (SGI4), a Korean information technology venture investment fund.
Cisco is anchoring the fund with KRW40 billion while Korean Venture Investment Corp. (KVIC) has committed KRW20 billion, according to a Cisco spokeswoman. KVIC’s commitment is the largest the government-backed fund of funds manager has made to a fund to date, according to a Cisco statement.
The eight-year fund is expecting a first close on KRW100 billion ($80 million; €56 million) shortly, Cisco said. It was submitted to the Korean Financial Services Commission for approval yesterday. The fund’s target size and final close date are undisclosed. It will focus on small and medium-sized enterprises in Korea’s IT sector as well as “growth engine industries”, the Cisco statement added.
The fund’s average deal size will be between KRW3 billion and KRW15 million. The firm would prefer a maximum of 20 portfolio companies in the fund, according to Kang-Suk Lee, a SkyLake managing director. Cisco, KVIC, the Korean National Pension Service and Korean insurance company Tongyang Life Insurance will co-invest alongside the fund.
SkyLake primarily invests in companies in Korea’s information and communications technology industries. The firm has offices in Seoul and Palo Alto and currently manages three funds. Its latest fund SGI fund 3 closed on KRW10 billion in September 2008.
KVIC was set up to promote the growth of Korea’s private equity industry. To date, it has committed about $1 billion into 120 private equity and venture capital funds in the country.