Korea Federation of Community Credit Cooperatives earns reputation for lucrative investment

A signboard of the Korean Federation of Community Credit Cooperatives (KFCC) / Yonhap

By Anna J. Park

The Korea Federation of Community Credit Cooperatives (KFCC), also known as MG Community Credit Cooperatives, has been building up a reputation in the local market in recent years as an aggressive investor capable of achieving high returns in alternative investments.

Over the past five years, the institutional investor has participated in various project funds as an anchor investor, injecting the largest amount of money into several investments. Many of its investments are now paying off, as the KFCC has been seeing an impressive rate of returns this year from its previous investments.

Earlier this year, Kamur Private Equity successfully sold an 88.8 percent stake in JamesTech ― Korea's leading thermistor sensor development company ― to a U.K.-based asset manager for around 100 billion won ($84 million). Given that the local private equity firm purchased the thermistor company in partnership with the KFCC for 40 billion won four years ago, the profits from the deal were more than double the principle put in by the investors originally. The KFCC invested 20 billion won out of the 40 billion won.

The KFCC also accounted for about 40 percent of a project fund in 2017 to purchase Majesty Golf along with Orchestra Private Equity. They purchased the golf brand for 78 billion won four years ago, yet they succeeded in selling it for around 300 billion won in September, resulting in profits more than triple the original investment.

The federation is also expected to reap a high rate of returns later this year from its investment in Tesna, a local semiconductor company. It was the anchor investor in the 200 billion won project fund led by ACE Equity Partners in 2019. As WiPAM signed an agreement with ACE Equity Partners last month to purchase Tesna for 400 billion won, the KFCC will also double its original invested money after just two years.

The KFCC also logged an impressive rate of return in its investment into Signet EV, a Korea-headquartered company dealing with electric vehicle (EV) charging. The KFCC injected 35 billion won in late 2018, which has more than quadrupled as of April this year after SK Group acquired the EV charging company.