MBK nears $2.6bn hard cap

The Korea-based private equity fund expects to close soon ‘vastly oversubscribed', having made a penultimate close on $2.3bn to-date.

Seoul-based MBK Partners has raised $2.3 billion to-date for its third private equity vehicle, a source close to the matter confirmed to Private Equity International. 

Despite exceeding its original target, the firm is yet to make a final close but expects to do so ‘vastly oversubscribed’ on its $2.6 billion hard cap, the source said.

The investors in the fund were not revealed. However, it has been heavily subscribed to by North American pension funds. Known LPs so far include Caisse de dépôt et placement du Québec, Ontario Teachers’ Pension Plan, Canada Pension Plan Investment Board and the Teachers’ Retirement System of Illinois, according to PEI’s Research & Analytics division.  

MBK declined to comment on fundraising. 

Woongjin Coway: MBK's latest Korea acquisition

The firm launched the $2.25 billion fund in September 2012, just weeks after it made a KRW1.1 trillion (€758 million; $981 million) investment in Korean air and water purification business Woongjin Coway from its previous fund. The firm managed to get control of the company despite taking only a 31 percent stake.

MBK Partners III has the same strategy as its predecessor and will invest in buyout opportunities across Greater China, Japan and South Korea, according to PEI’s Research & Analytics division.

The new fund exceeds the $1.5 billion raised for Fund II, which has a 2008 vintage.  

From its two previous vehicles, MBK has realised or partially realised six investments, which were producing a 2.6x gross multiple and 34.3 percent gross internal rate of return as of 31 December 2012, according to the source.
Since inception, the firm has invested $3 billion in 20 companies, generating a 2x multiple and 21 percent IRR. 

MBK Partners was established in 2005 and currently has $6.3 billion in assets under management, according to the firm. MBK has 30 investment professionals located in its four offices in Hong Kong, Shanghai, Seoul and Tokyo.