Many companies, big and small, sell or buy units to raise funds or narrow their focus during economic downturns, and to fund expansion or new growth engines during recoveries.
With growing economic uncertainties at home and abroad, South Korean corporates will increasingly turn to the capital market for their funding needs, said an industry executive.
“The trend of financially struggling companies using derivatives such as price return swaps, or PRS, to secure emergency funds has intensified, but such methods can negatively impact their credit ratings, making them less viable,” said Chanwoo Lee, chief executive of Glenwood Credit, the credit fund management arm of Seoul-based Glenwood Private Equity Co.
“Companies that need capital expansion without harming their credit standing will turn to us,” he said in a recent interview with The Korea Economic Daily.
He said demand for credit financing is set to rise significantly.
“Our strength lies in our ability to serve as an advisory firm, providing solutions tailored to industrial environments that companies face, such as a temporary slowdown or squeeze, known as the chasm,” the CEO said.
FOCUS ON STRUCTURED INVESTMENT OPPORTUNITIES
Glenwood is a leading alternative investment firm primarily focusing on Korea’s buyout opportunities.
Since its founding, Glenwood Private Equity has grown to become one of the fastest-growing alternative investment managers in Korea, with its private equity funds investing over $3.1 billion and successfully exiting from over $3.2 billion worth of investments on behalf of its investors.
Glenwood Credit, established in 2021, operates funds focused on structured investment opportunities, providing investors with a variety of risk-return profiles within the alternative investment space.
The investment firm said it seeks to deliver “superior returns” for its clients and is committed to generating sustainable long-term value and a positive impact for its portfolio companies.
MEZZANINE & DIRECT LENDING
Lee, who founded Glenwood Credit in September 2021, manages all of Glenwood Credit’s investments, including mezzanine – a hybrid of debt and equity financing – and opportunistic high-yield and special situation investments
Before Glenwood, he was the chief investment officer and senior partner of Dominus Investment Co., where he oversaw all aspects of investments, including deal sourcing, execution and fundraising activities
He also worked at Eugene Asset Management, Credit Suisse Securities and Bain & Company, handling M&A transactions and equity and debt financing for a wide range of global corporates.
He received a bachelor’s degree in economics from Seoul National University and an MBA from Columbia Business School.
NEW BLIND FUND FOR INVESTMENT
Glenwood Credit employs two investment strategies: mezzanine investments and direct lending. Its primary focus is on “downside protection,” which minimizes investment risks while ensuring a reasonable return on principal.
Following a 2021 regulatory amendment allowing private equity funds to lend directly to companies, Glenwood Credit gained access to strategies optimized for both mezzanine investments and direct lending.
Investment firms’ target returns for credit funds vary depending on asset class and risk levels but are generally set in the low 8-10% range per annum.
Last year, Glenwood Credit was selected for funding mandates from major financial investors, or limited partners, such as the National Pension Service, the Korean Federation of Community Credit Cooperatives, and the Yellow Umbrella Mutual Aid Fund.
Earlier this year, Glenwood Credit set up a 600 billion won ($413 million) blind fund to look for good investment opportunities this year, the CEO said.
By Jun-Ho Cha
chacha@hankyung.com
In-Soo Nam edited this article.
