Texas Pacific Group (TPG), a global private equity managing firm, is set to establish a massive Asia buyout fund worth approximately $5 billion. They plan to invest around 10% of this fund into the South Korean market.
According to Bloomberg and other sources, on the 26th, TPG is planning to close its eighth Asia buyout fund, which will have a volume of 5 billion dollars.
TPG intends to allocate 80% of this fund to markets in Australia, India, and Southeast Asia, a 10% increase from the 70% allocation of their seventh fund. On the other hand, the investment ratio for China will be reduced from 25% to 10%. The remaining 10% has been allocated to the South Korean market.
Buyout funds acquire the management rights of underperforming companies, increase the company’s value through restructuring or mergers and acquisitions (M&A), and then sell the company for profit.
TPG is one of the top three global private equity firms with assets under management (AUM) reaching $222 billion. Since acquiring the management rights of Korea First Bank through its Asian subsidiary, Newbridge Capital, in 1999, TPG has made its mark in the Korean market. After selling Korea First Bank in 2005, they exited the Korean market, only to re-enter in 2016 by recruiting Lee Sang Hoon and Vice President Yoon Shin Won from Morgan Stanley Private Equity.
TPG’s first investment after re-entering the Korean market was in Kakao Mobility. The new investment was praised as a model case of foreign investment, mainly through new share issues. Subsequently, they invested in Kakao Bank, Noksu, Bebecook, and Alvins. They held a shareholders’ meeting in South Korea in March last year. This was the first time TPG had held a shareholders’ meeting in South Korea in five years, since March 2018.
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