South Korean firms seek private equity investors in Hong Kong
Small to medium-sized enterprises in South Korea are seeking investors in Hong Kong for capital to expand in overseas markets.
"The money is now in Hong Kong and Singapore, these are where the hot money goes," said Christopher Park, director of Korean LED glass manufacturer G-Smatt, which is looking for about US$10 million to upgrade its plant and expand overseas.
The company was among a visiting group of Korean firms attending an investment forum organised by the South Korean government yesterday to explore business opportunities here.
"Large Korean companies like Samsung do not need to go overseas for capital. But SMEs need smaller funds, and the loans available in Korea are too large for them," Park said.
About 200 participants, including about 150 from Hong Kong and the rest from Korea, attended the forum and represented industries ranging from food processing to cosmetics and health products.
The event, the second of its kind in Hong Kong, included company presentations, panel discussions and one-on-one meetings to bring together local and Korean companies.
Many of the Hong Kong participants were from private equity funds with clients from the mainland.
Moon Jae-do, deputy minister for international affairs at South Korea's Ministry of Knowledge Economy, said many manufacturing SMEs needed capital to set up more factories locally and internationally and Hong Kong's financial industry, with so many private equity funds based here, could help.
"European countries are struggling to cope with their financial crisis, so it is quite hard for Korean companies to mobilise money from the European market," Moon said. "The US market is also sluggish."
"There is huge potential for co-operation between Hong Kong and Korean companies," said Oh Bo-ram, a Hong Kong-based assistant compliance manager at ComplianceAsia Consulting.
"Companies, particularly Asian firms, are not aware of many regulation and compliance matters and they need help, especially when they need to go overseas," she said.