Palo Alto, California-based H&Q Asia Pacific (H&QAP) has been awarded $200 million by South Korea's National Pension Corporation (NPC). The firm says the money will serve as "the anchor investment" for the new control buyout H&QAP fund.
The ultimate fund size will range up to $400 million. This is also the first time that the South Korean pension system has opened up to private equity.
H&QAP's Korea team formed a consortium with Korean financial institutions, including Hyundai Securities and Wise Asset Management, to participate in the bidding and selection process. Korea's Shinhan Private Equity, an affiliate of the Shinhan Financial Group, was also chosen to receive an anchor investment of $150 million.
"The Korean government has shown great leadership and vision by beginning to invest in its domestic private equity industry and we are very proud to be their partner in this important initiative," says Dr. Ta-lin Hsu, founder and Chairman of H&Q Asia Pacific. "We believe that the Korean economy offers many attractive opportunities for late-stage private equity investors and we look forward to working closely with our consortium partners for the benefit of our investors and portfolio companies. The addition of this new Korea fund to the H&QAP family reflects both the value of our regional network and the strength of our Korea team."
The new fund will make all of the investments domestically and is expected to start making investments in the second half of this year.
"The National Pension Corporation's selection process showed a high degree of rigour and a deep commitment to invigorate Korea's indigenous private equity industry," says Peter P.J. Ko, managing director, H&QAP Korea. "We are very honoured to have been chosen from such a group of successful and prestigious financial institutions. Under the sponsorship of the NPC and together with our consortium partners, the strategy of the new Korea fund will focus on late-stage control and buyout opportunities, which reflects a continuation of our successful track record in Korea."
Established in 1987, the Korean National Pension Corporation is the eighth largest national pension fund in the world and also the largest investor of private equity funds in South Korea. The National Pension Corporation currently manages assets of $150 billion.