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Korea PE returns outperform

PE-owned companies in South Korea generated returns of 40 percent in 2012, topping all other emerging economies, while investments in the country increased.

South Korean companies backed by private equity firms generated returns of 40.1 percent during 2012 and 19.2 percent during the fourth quarter, according to figures from research company Cambridge Associates.

The country was the top performer among emerging economies for both the quarter and the full year, with 80 percent of the annual gain attributed to manufacturing companies, data showed.

On the investment side, transactions in Korea have picked up. In 2013 to August, deal value was up 38 percent year-on-year to $3.7 billion, according to Thomson Reuters data, but the number of deals fell to 40 from 56.

Last year, total deal value nearly doubled to $3.8 billion compared to 2011, according to separate data from Mergermarket.

Korea's latest buyout came earlier this month when Baring Private Equity Asia bought Logen, a domestic parcel delivery company, reportedly for $140 million, Private Equity International reported earlier.

From January to July 2013, Korea also had the lowest price-to-earnings average (10.04) among eight key Asian stockmarkets, PEI reported earlier.

Korea's indicators standout in comparison to the region as a whole, according to the Thomson Reuters data. Private equity deals in Asia Pacific declined 19.7 percent year-on-year during the first seven months of 2013, to $12.2 billion from $15.2 billion.

Several firms are currently raising capital for Korea. Among them, MBK Partners is nearing a close on its $2.6 billion hard cap, “vastly oversubscribed”, PEI reported earlier.