SJL, Renowned for Cross-Border Deals, Postpones First Blind Fund to Next Year

From the First Half of This Year to Early Next Year...
"Selection and Focus"

SJL Partners, a firm specializing in cross-border deals, has postponed the formation of its first blind fund to next year. This decision appears to be due to the intense competition among small and mid-sized firms in the second half of the year, as well as the company's ongoing involvement in various projects, prompting a focus on selection and concentration.

According to the investment banking (IB) industry on August 6, SJL Partners has delayed the launch of its first blind fund to early next year. Since its establishment at the end of 2017, SJL Partners has only invested through project funds that target specific investments. In March of this year, the firm made its first attempt to create a blind fund by participating in the Korea Eximbank's first-half advanced strategic industry fund investment program in the large-scale category. However, it was not selected, losing out to JKL Partners and Keystone Partners.

SJL Partners has decided to prioritize the preparation of various ongoing projects and has therefore postponed the formation of a blind fund for the time being.

Until last year, most large PEF management firms such as MBK Partners, Hahn & Company, IMM Private Equity, and VIG Partners participated in investment programs and completed their fundraising earlier this year. In the second half of this year, competition among mid-sized and smaller management firms is expected to intensify. The National Pension Service, the largest investor, is also reportedly reviewing its investment plans for the second half. An IB industry insider stated, "Recently, competition in the investment market has become fierce among small and mid-sized firms. Not only simple track records but also each firm's unique strengths, such as SJL's cross-border capabilities, will become increasingly important."

SJL Partners is a private equity fund (PEF) management firm founded by Chairman Lim Seokjung, who led the JP Morgan Seoul office for 20 years. From its inception, the firm has quickly executed major cross-border deals. Lim's extensive network is considered a key factor in this success. Rather than operating independently, the firm has adopted a structure that collaborates with strategic partners, thereby dispersing risk and increasing access to cross-border deals.

A representative example is the 2019 acquisition of the US company Momentive, in which SJL Partners joined forces with KCC and Wonik QnC to invest 3.5 trillion won. In this structure, KCC managed the silicon division, Wonik QnC oversaw the quartz and ceramics divisions, and SJL Partners participated as a financial investor (FI). Although Momentive's IPO is still underway, the exit was completed as KCC acquired SJL Partners' stake.