Shinhan, KKR raise $200 mil. tailor-made fund

Shinhan Financial Group Chairman Cho Yong-byoung, right, shakes hands with KKR Co-President Joseph Bae at the Shinhan Financial Group headquarters in Seoul, after signing a memorandum of understanding regarding a strategic partnership for global alternative investment on Sept. 21, 2018 file photo. / Courtesy of Shinhan Financial Group

By Park Jae-hyuk

Shinhan Financial Group and KKR jointly raised a $200 million tailor-made fund, as part of efforts to enhance Shinhan's capability in global alternative investments, the nation's leading banking group said Thursday.

The Korean financial group and the U.S. private equity firm have pursued cooperation in various fields since September 2018 when they signed a memorandum of understanding regarding strategic partnership for global alternative investment.

Shinhan said the recently raised fund is especially tailored for Shinhan as the banking group is allowed to intervene in KKR's decision-making procedure when the foreign firm uses the fund for investments in its various portfolios worldwide.

In general, asset management companies can operate their funds independently, but Shinhan and KKR agreed to allow the former to consult with the latter about investment strategies.

Shinhan seeks to learn from KKR's experience and knowledge in global investments through this.

According to the financial group, $150 million raised by its bank, brokerage and life insurer units will be used for investments in a private equity fund in which KKR has shown its expertise.

Another $50 million will be used for real estate and infrastructure to ensure stable profits.

Shinhan said it agreed with KKR to continue to expand the size of the tailor-made fund, as well as pursuing partnership in various sectors with the global investment firm which has 21 offices in 16 countries on four continents.

“By raising the tailor-made fund with KKR, we have been able to seize a good opportunity to enhance profitability of our group's alternative investments,” Shinhan Financial Group Chairman Cho Yong-byoung said in a press release.

“In order to improve our group's capability of global alternative investments to be the world-best, we will strengthen our partnership with global asset management companies such as KKR.”