Unstoppable Mirae Asset Global Investments... PEF Market Expansion Forecast

Yoo Sang-hyun, Executive Director in Charge of Mirae Asset Daewoo PE, Appointed Head of PEF Division 2
Announces Focused Expansion of PEF Through Organizational Restructuring

[Asia Economy Reporter Minwoo Lee] Mirae Asset Global Investments is expanding its management participation private equity fund (PEF) through organizational restructuring.

On the 11th, Mirae Asset Global Investments announced that in addition to the existing PEF division led by CEO An Seong-woo, Executive Director Yoo Sang-hyun, who was in charge of private equity (PE) at Mirae Asset Daewoo, will take charge of the PEF2 division. Previously, Mirae Asset PE introduced PEFs to Korea for the first time in 2004 as an independent PEF specialized management division within the asset management company. It is recognized as a leader in the PEF market through various strategies including buyouts acquiring management rights, growth capital investments fostering co-growth with companies, and corporate financial structure improvement investments. The company plans to accelerate PEF expansion through this organizational restructuring.

A representative success case of Mirae Asset Global Investments' PEF division is the 2011 investment in Acushnet, the world's number one golf manufacturing company owning Titleist and FootJoy. This was the first case of acquiring a world-renowned company with a deal worth 1.3 trillion KRW. It was listed on the New York Stock Exchange in 2017 under the ticker 'GOLF.' Investors earned over 100% returns from this deal. It is considered the highest internal rate of return (IRR) among large domestic PEF overseas investments. IRR refers to the annualized return on investment. This deal was also selected as the 'Best Korea Deal of the Year' by Financial Asia.

Additionally, Mirae Asset pursued management rights sales of Korea Aerospace Industries (KAI), Korea's top manufacturer of aviation and defense-related parts, to major shareholders and the public, later switching to an initial public offering (IPO) according to market conditions. As a result, in just five years by 2014, they recovered three times the investment amount with an IRR of 29.3%. They also supported POSCO Special Steel's production facility expansion and entry into new markets such as Vietnam, achieving an IRR of 20% in 2015 through a joint sale with the major shareholder POSCO Group within one and a half years. Furthermore, Mirae Asset Partners No.1, with an investment scale of 140 billion KRW, achieved an IRR of 18.3% over about six years, recovering approximately 15 invested companies with IRRs ranging from 10% to 50%.

Recently, transactions have continued steadily. A representative example is the 2018 investment in Chinese 'Longdian,' a manufacturer of copper foil, a core material for secondary batteries. Producing 45,000 tons of copper foil annually, it is considered the world's number one by production capacity. Last year, 170 billion KRW was invested in production infrastructure. The market value is evaluated at more than twice the investment due to performance growth.

In March last year, an investment was made in 'Impossible Foods,' a company developing and manufacturing plant-based alternative meat. Investors include Bill Gates, founder of Microsoft, and Li Ka-shing, chairman of Hong Kong's Cheung Kong Group. According to Allied Market Research, the global alternative meat market size is expected to rapidly grow from 4.2 billion USD (approximately 4.61 trillion KRW) in 2017 to 7.5 billion USD by 2025. A representative from Mirae Asset Global Investments stated, "In addition, we are making various investments such as in Cha Healthcare, HK Inno.N, and Seoul Airport Limousine," adding, "Currently, the cumulative managed scale of Mirae Asset Global Investments' PEF division reaches 3.0943 trillion KRW."