More Than Half of 582.6 Billion Won NPS Investment Recovered
Separate Fund with 157.5 Billion Won Investment Achieves 2.2x Return
The National Pension Service has already recovered more than half of its investment in redeemable convertible preferred shares (RCPS) related to Homeplus, which was made through the private equity fund (PEF) manager MBK Partners. The amount invested in the blind fund, which included investments in Homeplus common shares as well as several other companies, has already yielded a return of more than twice the initial investment.
On September 23, MBK Partners disclosed these details regarding the National Pension Service's investment in Homeplus. The National Pension Service invested a total of 582.6 billion won in RCPS through a separate project fund set up by MBK Partners specifically for Homeplus. Over the past 10 years, 313.1 billion won has been recovered through dividends and other means, leaving an outstanding principal of 269.6 billion won as of now.
MBK Partners received a total fee of 100 million won for managing this investment, which is a very small portion relative to the overall RCPS investment amount.
An MBK Partners representative explained, "When Homeplus was acquired in 2015, approximately 2.1 trillion won in common share investments was executed through separate project funds from global pension funds. At that time, Homeplus was recognized for its stable cash generation, with annual earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching as much as 800 billion won, making it a favored investment destination among pension funds."
The National Pension Service also invested in MBK Partners’ Blind Fund No. 3-2. A blind fund is a type of fund where the investment targets are not specified prior to commitment. MBK Partners invested this fund in more than seven companies, including Homeplus common shares, Orange Life, Doosan Machine Tools, and Apex Logistics.
According to MBK Partners, the National Pension Service invested a total of 157.5 billion won, including 29.5 billion won in Homeplus common shares. To date, it has recovered 340 billion won, achieving a return of approximately 2.2 times the principal.
An MBK Partners representative explained, "Recently, MBK Partners decided to cancel 2.5 trillion won worth of Homeplus common shares without compensation in order to facilitate the approval of a merger and acquisition (M&A) of Homeplus. As a result, the National Pension Service’s 29.5 billion won investment in Homeplus common shares was written off entirely. However, thanks to successful returns from investments in companies other than Homeplus, the overall return on the National Pension Service’s investment in MBK Partners Blind Fund No. 3-2 still remains more than double the principal."
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