[PE Portfolio]⑥ Glenwood PE, The Driving Force Behind Becoming a Partner of Large Corporations

Glenwood PE, Known as a Major Corporate Restructuring Partner
Industry-Recognized 'Value-Up Know-How Without Excessive Restructuring'

Glenwood Private Equity (PE) is known as a restructuring partner for large corporations within the domestic investment banking (IB) industry. Celebrating its 10th anniversary this year, Glenwood PE is one of the fastest-growing private equity firms in South Korea. Over the past decade, it has invested more than $2.7 billion (approximately 3.73 trillion KRW) and successfully exited investments exceeding $2.8 billion. When companies respond to economic downturns by selling business units or subsidiaries, Glenwood PE steps in as a savior. It specializes in carve-out deals (sales of specific business units) for large and multinational corporations. Deals are conducted under strong trust with major conglomerates and strict confidentiality, with the advantage of a fast investment exit cycle. Currently, 14 investment management personnel operate Glenwood Korea PEF1 (453.7 billion KRW) and Glenwood Korea PEF2 (887.8 billion KRW). The CEO of competitor A Private Equity even remarked, "Everything Glenwood touches these days succeeds," reflecting the firm's strong business performance.

Sangho Lee, CEO of Glenwood PE

Private Equity Operated by Lee Sang-ho, Youngest Son of Former Samsung Group Vice Chairman Lee Hak-soo... Notable Ties to the Samsung Family

Glenwood PE recently attracted significant attention from the IB and business communities by realizing a profit of about 370 billion KRW through the resale of CJ Olive Young shares. The annualized internal rate of return (IRR) is reported to be around 30%. In 2021, Glenwood PE acquired a 22.56% stake in Olive Young for 410 billion KRW through a pre-IPO (pre-initial public offering) investment, becoming the second-largest shareholder. However, as the IPO was delayed, the shares were resold to the CJ Group. At the time of Glenwood PE's investment in 2021, Olive Young's corporate value was approximately 1.8 trillion KRW, which rose to about 3.5 trillion KRW at the time of sale.

Olive Young experienced rapid growth following Glenwood PE's investment. Sales increased from 2.1191 trillion KRW in 2021 to 3.3612 trillion KRW in 2023. Net profit during the same period grew more than threefold, from 94.9 billion KRW to 347.3 billion KRW. From CJ Group's perspective, this was a 'win-win' strategy where they received investment funds to expand their business, and Glenwood PE secured substantial investment returns.

When Glenwood first invested in Olive Young, the connection between the Samsung family and Glenwood PE's CEO became a topic of interest. Glenwood was founded and is operated by Lee Sang-ho, the youngest son of former Samsung Group Vice Chairman Lee Hak-soo, who had two sons and one daughter. Lee Hak-soo was appointed CEO of CheilJedang during the Samsung-CJ split and was known for opposing CJ Chairman Lee Jae-hyun (then Executive Director). However, the next generation set aside past conflicts and transformed their relationship into mutually beneficial business deals, a story that circulated in the industry for some time. Following his father, Lee Sang-ho graduated from Korea University, earned an MBA from Columbia Business School, and after working at Samsung Electronics and Goldman Sachs, he became independent in 2014. Together with co-founders Jung Chan (Chief Operating Officer) and Michael Jung (Chief Investment Officer), he established Glenwood PE and has maintained strong performance for 10 years.

Building Integrated Systems Without Excessive Restructuring of Acquired Companies... Why Conglomerates Prefer Glenwood

One of Glenwood's distinguishing features and strengths is its systematic post-acquisition integration without imposing excessive restructuring on acquired companies. Industry insiders interpret that one reason large corporate sellers prefer Glenwood as the final acquirer is that employees of target companies have not suffered from job insecurity in previous acquisitions.

Last year, Glenwood acquired LG Chem's in vitro diagnostic medical device business (diagnostics division), where Glenwood's integration system also shone. Glenwood acquired LG Chem's diagnostics division for a total of 200 billion KRW, combining an acquisition price of 150 billion KRW with a 50 billion KRW capital increase for additional investment. This division was renamed 'Invitros' under Glenwood PE's ownership. From the acquisition stage, Glenwood focused on minimizing the departure of key talent, as research personnel are directly linked to corporate competitiveness in this industry. Glenwood conducted a persuasion process with employees during the acquisition, resulting in most senior researchers transferring smoothly to Invitros. Invitros has been producing diagnostic reagent products since 1992 and has built a strong presence in the domestic diagnostics market. It has particularly secured technological capabilities in in vitro diagnostics for allergies, tuberculosis, and respiratory virus infections.

Another notable achievement of Glenwood is the sale of Korea Glass Industry and PI Advanced Materials. Glenwood acquired 100% of Korea Glass Industry's shares from Saint-Gobain Korea Holdings in 2019 for 312.7 billion KRW and sold them to LX International in January 2023 for 590.4 billion KRW (IRR 30.1%). PI Advanced Materials, acquired in 2020 for 606.9 billion KRW (54.1% stake) from SKC and Kolon Industries, was sold to global chemical company Arkema at the end of 2023 for 973.2 billion KRW (IRR 26.4%). Additionally, Glenwood has successfully exited investments in Dongyang Magic (now SK Magic), Lafarge Hanla Cement (now Hanla Cement), GS Energy's city gas subsidiaries Marine Energy and Seorabeol City Gas, among others.