LG Life Sciences, a full-fledged LG affiliate that spun-off from South Korea conglomerate LG Group/LG Chem in 2002, and the National Pension Service of Korea (NPS), are hiring managers. Hong Kong-based private equity firm Excelsior Capital Asia, pharmaceutical investor Burrill & Company, and Korean private equity firm K&K, will manage and invest as general partners (GP) a KRW400bn ($356m) private equity fund.
The fund will target overseas companies. LG Life Sciences and NPS signed a memorandum of understanding (MoU) to create the fund under a Corporate Partnership Program (CPP) to make overseas acquisitions, according to industry sources and a joint news report by M&A news providers, MergerMarket and Private Equity Korea. The two parties will invest KRW 200bn ($180m) each in the fund.
The managers will spread the investments across the next four years expecting to make a return on each deal within ten years from the fund’s establishment. Details of the fund and potential acquisition strategy have not been finalised, according to news reports.
Under the CPP, general partners will also be required to invest around one per cent of the entire fund in accordance with the guidelines of NPS, a sector banker who is familiar with the programme told Private Equity Korea. According to the news report, Korean companies including KT&G, SK Group, GS Engineering & Construction, KT, POSCO have also joined the programme for possible overseas acquisitions.
The MoU will be valid for two years, ensuring that LG Life Sciences and NPS have to complete the fund raising process by that time.