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.
PEFs reinforcing in-house operations teams
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By Park Jae-hyuk
By Park Jae-hyuk
Domestic and foreign private equity firms (PEFs) doing businesses in Korea are reinforcing their in-house operations teams for better management of their portfolio companies.
This came as more participants in the private equity industry have seen the necessity of operations professionals over investment experts, after PEFs have increased assets under their management and diversified their investment portfolios.
The latest example is home-grown IMM Private Equity, which is pushing ahead with the establishment of a separate operations entity to be completed by early next year.
According to industry sources, the new subsidiary will be led by executive director Eugene Kim, who returned to the firm after successfully selling Hollys F&B to KG Group. She is expected to devise strategies to enhance the value of IMM's portfolio companies, collaborating with experts in IT, finance, human resources management and marketing.
“For Korean PEFs to become competitive in the global market beyond the domestic one, they need to establish in-house operation teams,” Korea Capital Market Institute senior research fellow Park Yong-rin said in a report. “What is regarded as the best practice among global PEFs is having an in-house operations team.”
The most famous case is KKR Capstone, comprised of more than 70 full-time operating professionals dedicated to supporting the world's leading buyout firm's deal teams. They are working closely with KKR's investment teams to map out long-term strategies for their portfolio companies.
Some PEFs have established operation departments in their offices or hired operating professionals, rather than setting up separate companies.
In 2019, Hong Kong-based Affinity Equity Partners set up an operations group and hired former Hyundai Card Vice President Kim Jung-in as the group's leader. Kim previously worked at McKinsey & Company for nine years before joining the card firm in 2011.
Morgan Stanley Private Equity Asia's Seoul office is also said to have launched an operation team consisting of four industry experts earlier this year to increase the value of its portfolio companies in Korea ― Nolboo, Monalisa, Ssangyong C&B and Jeonju Paper.
As for domestic PEFs, MBK Partners has employed operating partners from outside since 2018. Former Samsung Futures CEO Cha Young-soo is one of those who joined the nation's leading PEF as an operating partner.
Hahn & Company and STIC Investments have also run operations teams for several years.