Korea’s NPS to commit $360m to PE trio

MBK, Vogo and Unison have been selected as the recipients of a 400 billion KRW capital commitment from Korea’s National Pension Service.

Korea’s National Pension Service, the world's fourth largest pension fund, has awarded a capital allocation of 400 billion KRW (€271 million; $359 million) to be split evenly between MBK Partners, Vogo Investment and Unison Capital Partners, according to two industry sources with direct knowledge of the matter.  

Each firm will receive capital commitments of roughly $130 million, sources said. NPS did not respond to request for comment.

NPS started awarding annual allocations around 2006 with the intention of jumpstarting Korea’s domestic private equity industry, one source explained. NPS would ask for applications from firms and then choose a handful of recipients to receive investment capital. The pension fund would set the investment conditions such as carry, management fees and duration. 

The award could boost fundraising momentum for the private equity trio, which are all in various stages of the cycle.

Back then, NPS only selected funds that were institutional GPs, perhaps sponsored by banks or securities firms. 

This year, independent firms set up by individuals were given preference. In addition, “every year the terms and conditions [attached to the investment capital] get closer to international practices”, the source said.

The 2013 allocation award includes buyout and growth capital categories. Because Korea's industry is now about eight years old, NPS could use track records to assess applications. 

The three firms were selected out of a pool of applicants in the buyout category. Unison is Tokyo-based but the firm had an office in Korea and a  history of Korean investment activity.

The award could boost fundraising momentum for the private equity trio, which are all in various stages of the cycle.

As Private Equity International reported earlier, Unison is considering raising Fund IV this year and MBK Partners is nearing a final close on its $2.6 billion hard cap for its third fund. 

Vogo is raising Fund III with a target of $650 million, according to PEI’s Research & Analytics division.

Korea's National Pension Service is the world’s fourth largest pension fund. It manages $360 billion in assets with a 1.3 percent allocation to private equity, according to PEI’s Research & Analytics division.

In May, NPS brought in a new chairman and chief executive, Choi Kwang, after his predecessor, Jun Kwang-woo, resigned in February after a government reshuffle, PEI reported earlier.