Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Shinhan, Carlyle to set up $1.68 bil. joint fund for overseas investment
By Lee Min-hyung
Shinhan Financial Group's headquarters in Seoul / Courtesy of Shinhan Financial Group
By Lee Min-hyung
Shinhan Asset Management is set to join hands with Carlyle Group by establishing a joint investment fund worth around 2 trillion won ($1.63 billion).
Both companies are in the advanced stage of talks on how to manage the fund for overseas investments for the next three years in areas such as equity and infrastructure financing.
“Talks have been underway for the establishment of the joint fund, but nothing specific has been confirmed over what forms of investment they are going to focus on and when exactly the fund will be launched,” an official from Shinhan said, declining to provide details.
Starting as early as the first half of 2022, the two companies are expected to start the joint project, under which Shinhan Financial Group will invest 1 trillion won.
This new partnership will allow Shinhan to expand its overseas asset management and investments.
This instance is not the first time that the Shinhan affiliate has joined hands with the global private equity firm. Back in July 2020, the former Shinhan Alternative Investment Management, which merged with Shinhan Asset Management, signed a joint project with Carlyle and Hana Financial Group to establish a $600-million infrastructure fund. The fund was used to invest in global infrastructure projects such as roads, railways and ports.
At that time, Shinhan was in charge of managing the fund in the local market. But this latest partnership between Carlyle and Shinhan is somewhat different. This time, Shinhan will be able to expand its role to sourcing deals by taking part in finding new investment areas.
This arrangement marks a major difference from Shinhan's earlier contracts with global private equity firms. Major financial holding firms here have so far clinched a series of partnerships with top-tier private equity companies, but the role of the former firms was mostly limited, without them having autonomy in handling key deal-making processes.
“The establishment of the joint fund with Carlyle is important for Shinhan for enabling us to make proactive investments,” the official from Shinhan said. “This will lay the foundation for both companies to continue widening their ties down the road.”