Private equity firm Carlyle targets more buyouts in South Korea
Equity group says nation offers attractive market and good deals as it sustains growth
Carlyle Group, which completed South Korea's biggest private-equity buyout in five years, sees more large transactions as the nation sustains its economic growth amid emerging-market turbulence.
The buyout firm, whose Asian investments span budget hotels to injectable drugs, agreed to buy Tyco International's fire-alarm business in Korea for US$1.93 billion earlier this month. Preqin data show buyouts backed by private equity rose 65 per cent to US$4.3 billion last year, the most since at least 2008, including forays by MBK Partners into hiking gear and H&Q Asia Pacific into online recruiting.
Asia's fourth-largest economy offers buyout opportunities as President Park Geun-hye accelerates state-asset sales and the nation's biggest business groups offload underperforming businesses.
"Korea is an attractive mar- ket because it has stable economic growth with a consis- tent deal flow of large buyout transactions," said Sanghyun Lee, the Seoul-based managing director of Carlyle's Asia buyout team.
Fundraising for private equity activities globally totalled US$428.7 billion last year compared with about US$315 billion in 2012, according to data. Of that, almost half, US$205.5 billion, was for buyouts.
South Korea's biggest private equity deals last year included the purchase by MBK and local funds of ING Life Insurance Korea from Dutch lender ING for US$1.75 billion in August, and MBK's 550 billion won (HK$3.98 billion) acquisition of a stake in Nepa, which has the largest retail network in Korea's outdoor apparel market.