National Pension Service: "No Investment in MBK Hostile M&A"

Expected to Be Reflected in Future Management Contracts with Private Equity Funds

The National Pension Service (NPS) has decided not to invest in MBK Partners' hostile mergers and acquisitions (M&A). This policy will also be reflected when signing future management contracts with private equity funds (PEFs).

On the 17th, the NPS announced that it had finalized a contract including a clause stating it would not participate in the hostile M&A investment case related to MBK Partners' blind fund in February.

Despite recent incidents such as the management dispute over Korea Zinc and Homeplus filing for corporate rehabilitation, news emerged last month that the NPS had committed additional contributions to a new fund, prompting the NPS to clarify its position. The NPS emphasized that it will not respond even if MBK Partners requests NPS participation in dispute investments like the Korea Zinc case in the future.

This policy is expected to be applied to future investments as well. An NPS official stated, "We are considering reflecting this in the articles of incorporation and other contracts of PEFs that the fund will invest in going forward."

According to the investment banking (IB) industry, the NPS had finally selected four domestic private equity fund managers, including MBK Partners, in July last year. Typically, management contracts are signed within two to three months after final selection, but the NPS closely monitored MBK Partners' management dispute with Korea Zinc. After dragging on for about seven months, the NPS decided to invest approximately 300 billion KRW.

In announcing its position today, the NPS also explained the delay in contract signing. The NPS stated, "In the case of this fund manager, since the final selection, there have been ongoing concerns that some management strategies, including the controversy over hostile M&A investment in Korea Zinc, do not align with the NPS fund's management direction," adding, "We conducted case reviews and legal consultations regarding hostile M&A investments, and based on the results, considerable time was spent in continuous negotiations and coordination with the fund manager."

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