The Korea Investment Corporation (KIC) is expected to commit between $100 million and $200 million to two to three Korean private equity firms in its first allocation to homegrown PE houses in its two-decade history, according to investment banking sources on Tuesday.
The sovereign wealth fund is likely to award the mandates to private equity firms that focus on financing cross-border M&As involving South Korean companies as strategic investors, according to people familiar with the matter.
KIC is expected to issue a request for proposals for the capital commitment in the near term and finalize the selection around November.
Founded in 2005, KIC manages $206.5 billion entrusted by the Bank of Korea and the finance ministry as of the end of 2024. It is banned from making domestic investments.
The fund includes a $5 billion commitment made in 2015 by the finance ministry, earmarked for investments in outbound M&A deals. However, no investments have been executed with the capital.
A private equity industry official said the upcoming mandates reflect KIC’s efforts to diversify its deal sourcing and support Korean companies’ overseas expansion.
Its fund allocation to homegrown funds is also expected to inject fresh momentum to the domestic private equity industry, while helping local firms build a global presence.
By Gyeong-Jin Min
min@hankyung.com
Yeonhee Kim edited this article.
