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Temasek, Ontario ‘agree’ $750m Kim punt

Michael Kim, the former co-head of Asian buyouts at Carlyle Group, has quickly amassed $750 million of commitments for his spinout fund MBK Partners, according to a report.

MBK Partners, the new Asian private equity firm launched by a team of former Carlyle Group professionals, has secured $750 million (€613 million) of commitments for its debut fund, according to a report in the Wall Street Journal. The fund has a final target of between $1 billion and $1.5 billion. 

The report said Temasek Holdings, the investment arm of the Government of Singapore, has agreed to invest $500 million in the fund, while Canada’s Ontario Teachers Pension Plan has agreed to commit $250 million.

The fund was officially launched just two months ago, following the departure of Kim and five of his colleagues from Carlyle Group in March. Other members of the team include Kensuke Shizunaga, the former managing director of Carlyle’s Japan team, and K C Kung, who was previously a member of the Carlyle team in Singapore.

Having been appointed head of Korean buyouts at Carlyle in 1999, Kim went on to lead a number of seminal deals including a $412 million investment in Korea’s Koram Bank, which was sold to Citigroup for $2.7 billion last year.

MBK will target divestments from conglomerates, government privatisations and private company sales in Japan, China and Korea.

North American investors look to identify those managers who have the potential to do well and get in quick

Tokyo-based fund adviser

A Tokyo-based fund adviser said he is not surprised by reports of Temasek’s and Ontario’s involvement. “Temasek has an approach geared to identifying the best managers and it is sophisticated enough to analyse the risk of investing in spinouts, while North American investors look to identify those managers who have the potential to do well and get in quick.”

By contrast, the source said Kim may face a harder task attracting support from Japan, where the natural conservatism of investors tends to mitigate against committing to first-time funds. “They wait and see whether such funds have been successful and then try to get into the second fund – assuming it’s not massively oversubscribed,” he said.

Established in 1974 to invest on behalf of the Government of Singapore, Temasek Holdings has a S$90 billion portfolio, 52 percent of which is invested in Singapore-based assets including Singapore Airlines and SingTel.

The Ontario Teachers Pension Plan, which has $85 billion of net assets, is responsible for investments on behalf of Ontario’s 158,000 teachers and 97,000 retired teachers.

Earlier this week, South Korean start-up Bogo Investment announced it was aiming to raise up to $1.5 billion by the end of March 2006 for investment in local companies. The firm is headed by Byeon Yang-Ho, a former director general of the South Korean finance ministry’s financial policy bureau.