“One of the best kept secrets of Asia,” according to a Goldman Sachs analyst, is South Korea’s red-hot private equity market. In a recent article, Christian Davies of the Financial Times noted a growing trend in the South Korean economy, which has been known more for its manufacturing prowess rather than financial wizardry. In 2021, South Korea’s private equity deal value was nearly USD 30b, greater than Japan’s and trailing only China and India in Asia.
The growth of South Korea’s private equity market has been remarkable, especially considering the 1997 East Asian Financial Crisis that ruined many South Korean conglomerates with precarious access to capital. Today, homegrown Korean private equity firms like MBK Partners, with USD 25.6b in assets under management, are going toe-to-toe with global PE firms like KKR and the Carlyle Group.
South Korea’s maturing economy is fertile ground for these financiers. The older patriarchs of chaebol 재벌 conglomerates are retiring or passing away, necessitating a corporate restructuring that typically accompanies management succession. (See previous coverage, “Lee Geon-hee’s Death Pushes Samsung to Restructure.”)
Meanwhile, the private equity firms can also travel with the Korean conglomerates that are flush with cash and looking to invest abroad, such as SK Group that is planning to invest USD 52b in the United States for electric vehicle battery factories.