Carlyle Group's former co-head of buyouts in Asia, Michael Kim, is quickly amassing cash for his private equity start-up, MBK Partners.
Temasek Holdings (Private) Ltd., the Singapore government's investment arm, has agreed to invest $500 million with Kim, according to investors familiar with MBK's efforts. In addition, the Ontario Teachers Pension Plan said it had committed $250 million. The money amounts to a strong vote of confidence in Kim, who left Carlyle Group in March to create MBK Partners with a handful of former Carlyle investment professionals.
Temasek declined to comment. Kim did not respond to messages seeking comment.
Kim and other executives of MBK Partners, based in Seoul, are now in the United States pitching to investors for additional funds. Pointing to the commitments from the two investing behemoths should make it easier to attract new money, one investor said. MBK Partners is seeking a minimum of $1 billion, which it will use to pursue buyouts mainly in South Korea and Japan, people familiar with the fund said.
While at Carlyle, Kim executed one of the firm's biggest successes in Asia: the purchase and subsequent sale of KorAm Bank. In 2000, Carlyle and a group of investors paid $412.3 million for 40 percent of KorAm, one of South Korea's largest banks. Then, last year, Carlyle and its partners reaped more than double their investment when Citigroup Inc. bought the entire bank for $2.73 billion.
Some in the industry expect the environment in South Korea to get tougher for foreign private equity firms, as Korean companies bid more aggressively for businesses that go up for sale. Hite Brewery Co.'s recent triumph over rival bidders, including Newbridge Capital Ltd. and CVC Asia Pacific Ltd., to buy beverage maker Jinro Ltd. for $3.38 billion signaled a new competitive era.
Meanwhile, a popular backlash has arisen against foreign investors who take profits out of South Korea. Last year, a prime-time Korean documentary cast foreign firms, such as Carlyle, as opportunists that make money on the backs of Korean laborers. In the weeks leading up to the Jinro sale, foreign investors formed bidding groups with Korean companies -- to avoid any appearance of carpetbagging, some observers said.
Kim's firm is well positioned to benefit from the backlash, as is another new fund, Vogo Investments, which plans to invest exclusively in South Korea. A former Korean finance ministry official, Byeon Yang Ho, recently teamed up with a pair of prominent investment bankers, who previously worked at Lehman Brothers and Morgan Stanley, to start Vogo.
The three are raising money from local financial institutions, such as banks and life insurance companies.