Ilshin and Macquarie Bank raise $100m for Korean fund

Ilshin Investment, the venture capital subsidiary of a Korean cotton spinner, has joined hands with Australia’s Macquarie Bank to raise a $100 million Korean mid-market growth and buyout fund.

Ilshin Investment, a Korean venture capital investor, and Australia’s Macquarie Bank have raise $100 million to fund mid-market expansion and buyouts of Korean companies.

Koh Jeong Suk, president of Ilshin said Global Star Korea Fund closed at the end of June and drew nine investors including KVIC, a Korean fund-of-funds, Korea Local Administration Officials’ Mutual Fund, and National Agricultural Cooperatives Federation, a Korean bank that also invested in MBK Partners.

Koh: identified two potential investments

Ilshin jointly-launched and managed the fund with Macquarie Bank which sponsored $5 million of the fund’s total commitments, Koh added.

He said “Global Star aims to provide growth and expansion capital, as well as conduct buyouts of Korean companies that have the potential to go global, like export-oriented companies.”

The fund will invest in probably six or seven deals, and each transaction will range between $10 million to $20 million. For buyouts, there is the option to co-invest with a strategic partner for transactions worth up to $100 million.

Ilshin is focusing on manufacturing, service and late-stage technology. It will also consider companies involved in electronic components, shipbuilding, specialty chemicals and automobile parts.

In the short term, Ilshin has identified two potential investments, Koh said.

Global Star Korea Fund achieved a first close on $50 million in February last year, and $95 million at the end of 2005, during the fund’s second close, before achieving a final close on 30 June. The private equity fund represents a second attempt by Ilshin to expand beyond providing venture capital, and into private equity investments.

Previously, the firm had raised a $30 million fund jointly managed by AMP Life, an Australian insurer and financial institution, but the fund was terminated due to a change in the latter’s strategy to shift away from private equity.

Established in 1990, Ilshin has over $300 million under its management, mostly in venture funds. Koh heads two separate teams – one for venture, and the other for private equity investing. The private equity team of five includes two professionals seconded from Macquarie.