National Pension Service Scores Big with 250 Billion KRW Early Investment in BTS

[Image source=Yonhap News]

[Asia Economy Reporter Park So-yeon] The National Pension Service made an investment profit of approximately 250 billion KRW from its early investment in HYBE (formerly Big Hit), the agency of BTS.

According to the investment banking (IB) industry on the 21st, the National Pension Service invested about 250 billion KRW in the ‘Stick Special Situation No.1’ (Stick No.1) fund, which was established in 2016 and is scheduled to mature and liquidate in 2024. This amount accounts for about 30% of the total fundraising of the fund.

This fund, raised by Stick Investment, invested 104 billion KRW in October 2018, when BTS began gaining popularity in the global music market, acquiring 3,462,880 existing shares of HYBE. Stick Investment earned more than nine times the profit over 2 years and 8 months until it recently exited (recovered funds) all of its HYBE shares.

On HYBE’s first day of listing last October, Stick sold 196,177 shares on the market at 312,874 KRW per share, earning 61.37868 billion KRW in profit. Then, in December last year, it sold 400,000 HYBE shares in a block deal at 165,215 KRW per share, amounting to approximately 66.086 billion KRW. Finally, on the 28th of last month, Stick conducted off-hours trading of 2,866,703 HYBE shares. The disposal price was 284,000 KRW per share, allowing Stick to secure an additional 814.1 billion KRW and fully recover its investment in HYBE.

Through these three sequential sales, Stick generated a total profit of 941.56418 billion KRW. Since the National Pension Service holds about 30% of the shares, it invested 31.2 billion KRW and earned 282.4 billion KRW. An industry insider explained, "The HYBE investment case has recently completed all distributions to investors." Other major pension funds besides the National Pension Service also participated and realized large-scale profits.

Meanwhile, the fund’s portfolio includes not only HYBE but also Hanwha Systems, HK Inno.N, Hancom Lifecare, and DDI (DoubleDown Interactive). The investments in HYBE and Hanwha Systems have been fully recovered and distributed, while investments in the other companies are still ongoing. The fund’s maturity is set for 2024.