Seoul-headquartered MBK Partners has leapt 25 places in this year’s PEI 300 into 26th position with a five-year fundraising total of $10.9 billion, making it the highest-ranked Asia-headquartered firm.
Despite a roller coaster 2016, MBK amassed $4.1 billion against a $3.5 billion target for its fourth buyout fund in an impressive ‘one-and-done’ that took just two months. The vehicle had a re-up rate of more than 80 percent, including capital commitments from its five largest LPs – Temasek Holdings, Canada Pension Plan Investment Board, PSP Investments, Ontario Teachers’ Pension Plan and the China Investment Corporation, sources familiar with the matter told PEI.
The fund also welcomed new US and Asian investors such as Japan Post, Samsung, the New York State Teachers’ Retirement System, the British Columbia Investment Management Corporation and the California State Teachers’ Retirement System.
In fact, Fund IV had nearly $8 billion in demand; the firm “had to cut a lot of people out altogether and cut back allocations to stick to its hard-cap,” the sources added. Fund IV has the same mandate as MBK’s previous funds, focusing on buyouts in the financial services, technology, media and telecommunications (TMT), healthcare and retail sectors in China, Japan and South Korea.
This is all despite the fact that one of the firm’s founders left mid-fundraise to set up his own firm. MBK also faced potential losses with its investment in cable TV operator D’Live. To top it off, the firm was hit with a class-action lawsuit after nickel components were found in dispensed water from a water purifier company it owned.
However, the firm is understood to be producing top-notch returns. A source familiar with the matter told PEI that the 2008-vintage $1.5 billion Fund II and the 2013-vintage $2.7 billion Fund III are some of the best-performing funds in Asia of their respective vintages, delivering returns in the high 20s and the mid-20s respectively. The freshly-raised Fund IV is targeting a return of 25 percent, the source added.
For his part, partner and co-founder Michael Kim, who declined to comment on returns, said MBK remains popular with LPs because “north Asia is finally poised to realise its potential as a strong market where private equity capital can come in, invest, create value and make profitable exits for investors”.
Click here to read the full PEI 300 report.