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South Korean Private Equity Fund (PEF) Market Size
M&A/IPO
Korean M&A and IPO
Expert Guidance, Fair Outcomes
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South Korean Private Equity Fund
(PEF) Market Size
01.
Since its opening in 2005, the South Korean PEF (Private Equity Fund) market has experienced steady growth. According to the latest data, the total planned investment amount reached approximately USD 530 billion by the end of 2015 and further increased to USD 565 billion in 2016.
02.
History of PEFs in South Korea:
The PEF (Private Equity Fund) industry in South Korea is largely influenced by the United States. Following financial crises in both Korea and the US, PEF capital began to enter the Korean market.
Initially, there was significant resistance to PEFs among the general public and even some politicians. The perception was that PEFs were solely focused on extracting profits, leading to the outflow of national wealth from Korea.
However, in recent years, as PEFs have increased their investments in Korea, positive news has emerged, and the Korean government, particularly the Financial Supervisory Service, has adopted a more supportive stance towards PEFs.
03.
PEF Investments in South Korea
Despite raising record capital, PEFs in South Korea still struggle to find suitable investments. Domestic investors point to Korean founders' hesitancy towards external funding, hindering promising projects. A generational shift is emerging: as founders near retirement, their children show little interest in inheriting the businesses, prioritizing cash assets rather than the businesses themselves. This new state of affairs presents a new opportunity for PEFs.
04.
PEF Investments in South Korea
If you are interested in PEFs and M&A (Mergers and Acquisitions) in South Korea, please visit the "REQUEST" section to leave your inquiries. We will be happy to address your questions in detail.
05.
South Korean IPO Market
The stock market symbolizes the pinnacle of capitalism, and for many entrepreneurs, going public (IPO) is the ultimate aspiration. Despite the existence of primary stock markets like China's New Third Board, numerous entrepreneurs express dissatisfaction due to low transaction activity. Notably, South Korea's securities market extends opportunities for foreign companies to undergo listing processes. In 2016, eight Chinese companies were listed in South Korea, with an average raised capital ranging from $300 million to $500 million. While this may not rival the domestic main board market, the expedited listing review process, lower scale requirements compared to China, and high market activity have prompted domestic companies eager to circumvent waiting queues to shift their focus towards South Korea's IPOs. It's noteworthy that while the Korean securities market acknowledges the BVI structure, it does not recognize the VIE structure. Companies with such plans should exercise caution.
PEF
PRIVATE EQUITY FUND
For all matters related to Korean PEF investment and M&A,
Please contact Hereup Co., Ltd.
Basic Requirements for Listing in South Korea
1
KOSPI Main Board
Net assets of 30 billion Korean won
※Operating performance must meet one of the following criteria:
01. Sales and profits:
Sales of 100 billion Korean won in the most recent fiscal year and an average of 70 billion Korean won over three years.
For each fiscal year, the operating profit, total profit, and current net profit must meet the minimum requirement, with the lowest amount not less than one of the following:
-
* ROE*5%, totaling over 10% over three years
-
* Net profit of at least 3 billion Korean won in the most recent fiscal year and a total of at least 6 billion Korean won over three years.
02. Sales and total market value:
Sales of at least 100 billion Korean won and a total market value of at least 200 billion Korean won.
KOSDAQ Growth Market
Net assets of 3 billion Korean won or a total market value of 6 billion Korean won or more.
※ Profitability must meet one of the following conditions:
2
ROE*10% or more in the most recent fiscal year.
Profit of at least 2 billion Korean won in the most recent fiscal year.
Sales of at least 10 billion Korean won in the most recent fiscal year and a total market value of at least 30 billion Korean won.
