Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Shinhan attracts W1.15 trillion from Affinity, Baring
Shinhan Financial Group's headquarters in Seoul. / Korea Times file
By Park Jae-hyuk
By Park Jae-hyuk
Shinhan Financial Group Chairman Cho Yong-byoung's close relationship with the heads of global private equity firms (PEFs) has helped his company attract another large investment from Hong Kong-based buyout firms.
The Korean financial holding company said Friday its board of directors approved the company's plan to issue new shares worth 1.15 trillion won ($966 million) to Affinity Equity Partners and Baring Private Equity Asia.
“Through the latest capital increase, we will be able to preemptively cope with uncertainties caused by the COVID-19 pandemic and seek various opportunities at the time of the economic recovery,” a Shinhan official said.
“Using our increased capital, we will improve our profitability and come up with measures to increase our shareholder value. We will also communicate with the market regarding our plans on capital management.”
According to sources familiar with the issue, a meeting between Cho and Affinity Chairman Park Young-taeg was behind the recent deal. Sources said Park visited Korea last month to meet Cho and decided on the investment as he considered the Shinhan shares were underestimated.
The Shinhan chairman has been known for his interest in global PEFs.
He had meetings with KKR Co-President Joseph Bae and Carlyle Group Co-CEO Glenn Youngkin last year.
This led to the banking group's strategic partnership with KKR. Shinhan invested 200 billion won in a fund that was raised for investments in KKR's various assets worldwide. Shinhan Alternative Investment Management also joined with Carlyle and raised a $600 million fund.
In 2019, Shinhan attracted investments from IMM Private Equity, one of the leading local PEFs.
Some market observers speculate that the company may use the money it raised from the recent deal in pursuing additional mergers and acquisitions (M&As), such as the acquisition of AXA Korea.