MBK raises $1.56bn in debut buyout fund

MBK Partners created ripples when its founders left Carlyle to raise a billion dollars, and now they are making a grand entrance with a $1.56bn debut fund.

MBK Partners has raised $1.56 billion (€1.22 billion) in a debut North Asian buyout fund, catapulting it into the top tier of buyout firms in the region.

The Carlyle Group has just closed the largest ever Japan buyout fund on $1.9 billion and is also expected to raise in excess of $1.5 billion for a pan-Asian ex-Japan buyout fund. CVC closed a pan-Asian fund toward the end of last year on $1.975 billion.

Michael Kim, founding partner of MBK Partners, said demand for the MBK Partner’s fund was so strong the new private equity firm had to increase in size to meet some of that demand.
The fund which is focused on Korea, Japan and China and had an original $1-billion target drew institutional investors from North America, Europe, Middle East, and Asia.

MBK was established to provide “a local independent alternative” in Korea, Japan and China. The firm was founded by Bu Jay, Michael Kim, Kung Kuo Chuan, Shizunaga Kensuke and James Yoon Jong Ha, all executives from Carlyle.

Michael Kim said: “As important as our localness is our independence: we are the first homegrown Asian GP, owned by Asians and investment decisions made by Asians, not by headquarters based in the US or Europe.”

Kim said MBK is registered with, and sanctioned by the Korean regulators as a “domestic private equity firm”. Foreign private equity firms have come under particular scrutiny since the Korean tax office started a series of probes late last year into tax-free gains made by them.

MBK is making two investments in Korea via a $92.7 million acquisition of Hanmi Capital, a leasing company, and a $126 million acquisition of HK Mutual Savings Bank, Korea’s second largest mutual savings bank.

The two Korean deals follow an investment, made last year in October, in Beijing Bowei Airport Support, a service provider of airport maintenance.