1. PEF Market & Venture Capital Korea Where Success Knows No Limits 2 Index 1. Overview3 2. Korea’s PEF Market4 3. Korea’s Venture Companies17.

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Presentation transcript:

1

PEF Market & Venture Capital Korea Where Success Knows No Limits 2 Index 1. Overview3 2. Korea’s PEF Market4 3. Korea’s Venture Companies17

Background 3

4 2. Korea’s PEF Market Overview5 Status of the Korean PEF Market6 Growth of the Korean PE market7 Fund Cycle9 PEF Regulation Reform13 Korean LPs15 PEF Market & Venture Capital Korea Where Success Knows No Limits

Overview of Korean PEF investments 5 Great market growthpotential Evaluation Regulation reforms to stimulate investment Limitations in exit & in exit &value-up Solution Limitation

PEF Commitment and Number of PEFs Status of the Korean PEF Market 6 Current status of PEF investment Source: Financial Supervisory Service (FSS), as of December 2014 PEFs

Growth of the Korean PE market Alternative investment of the Korea Pension Fund Ratio of PEF Investment of Korea's National Pension Fund 3.6%(8.0bn) 4.9%(11.9bn) 6.5%(17.5bn) 8.1%(24.1bn) 9.1%(29.8bn) 10.1%(36.3bn) 7 Alternative Investments of Korea's National Pension Fund (Unit: %, KRW trillion)

Growth of the Korean PE market Growth potential : PE penetration ratios PE Penetration Ratio by Country 8

Overview of the Korean PEF fund cycle 9 Investment PEfundraising Value up Exit

Yearly Added Funds (Committed Capital) Region Korea (KRW tn.) World (USD bn.) Fund Cycle PE fundraising 10

Fund Cycle Exit 11 Annual PEF Liquidation and Exits Year 2004 – Total No. of PEF liquidated Exits (KRW tn.)

Fund Cycle Major domestic GPs 12

PEF Regulation Reform 13 PEF Contribution (2012) In September of 2014, the final amendments to the Financial Investment Services and Capital Markets Act (FSCMA) were submitted and they are now pending. Aims -To amend the minimum investment limit -To adopt a public fund of funds -To lessen management restrictions -To diversify allowed fund types

PEF Regulation Reform Reorganization of the PEF system Reasonable Limits for PEF Investors Sale & Advertising PEFs 4 Allocation / Management of PEF Funds and Assets Reporting System Offshore PE Funds – Fundraising in Korea Restrictions on Transactions With Related Parties

PEF Regulation Reform Offshore PE funds – fundraising in Korea Offshore fund managers with investment discretion over a fund with Korean investors must acquire a cross-border discretionary investment manager (“CBDIM”) license from the FSS. 15

Korean LPs Asset size of major Korean LPs RankingLimited Partner (LP) Size (USD bn.) 01National Pension Service (NPS)436 02Korea Post (Office of Postal Service)103 03Korea Finance Corporation (KoFC)70 04Korea Investment Corporation (KIC)65 05The Korean Teachers’ Credit Union (KTCU)23 06The Korea Teachers Pension (TP)15 07The Military Mutual Aid Association (MMAA)6.9 08Public Officials Benefit Association (POBA)6.2 09Government Employees Pension Service (GEPS)4.2 10Growth Ladder Fund1.8 11The Police Mutual Aid Association1.6 12Construction Workers Mutual Aid Association (CWMA)1.5 13Korea Venture Investment Corp (KVIC)1.4 16

17 3. Korea’s Venture Companies Status of Korean Venture Companies18 VC Funding Resources20 VC Investment Performance22 Exit24 PEF Market & Venture Capital Korea Where Success Knows No Limits

Status of Korean Venture Companies Current status of venture companies Companies sponsored by venture capital funds 39.5% 1 to 5- year-old companies26% 5 to 10-year-old companies26.1% 10 to 20-year-old companies 72% Manufacturing sector16% IT software 29,135 Venture companies

Status of Korean Venture Companies Current status of VC fund formation & investment Source: KVCA (2013) 49 funds established $ $ $ $ 431 funds established KRW bn. KRW 10,410 bn. $ $ $ $ $ $ 19

VC Funding Resources Funding resources 41.6%16.6%14.8%14.3% 20

VC Funding Resources Top 10 Venture Capital Funds VC Investment Company Funds Raised (A) Invested Amount (B) Invested Ratio (B/A, %) Dry Powder (A-B) 01Korean Investment Partners LB Investments STIC Investments Atinum Investment INTER VEST Hanwha Investment IMM Investment KTB Network Premier Partners HB Investment Total4,1522, ,360 (Unit: KRW bn., %) 21

Yearly Investment VC Investment Performance VC investment performance Source: KVCA (2013) (Unit: KRW 100 mn.) 22

VC Investment Performance Analysis of investment patterns: Investment by industry 35.2%22.5% 20.6% 10.6% ♪ ♬ 23

Types of Exits Exit Status of exits by type 24