CVC Credit raises $47m from Korean investors

Smaller Korean investors are following in the footsteps of the leading LPs in their country by investing in private debt.

A group of South Korean insurers have committed a total of €44.2million ($47 million) to CVC Credit Partners’ European private debt fund.

The commitment was made through a fund of funds launched by Hana Financial Group dedicated to CVC Credit Partners European Mid-Market Solution Feeder Fund. The seven-year FoF offers an expected return of 6 percent to 7 percent per annum.
The CVC Credit Partners European Mid-Market Solution Feeder Fund feeds into master fund, CVC Credit Partners European Mid-Market Solutions Fund. The fund seeks to provide private debt to mid-market European companies with between €10 million and €75 million in earnings before interest, tax, depreciation and amortization, according to sources close to the matter.

The investment principal and 70 percent of dividend incomes will be hedged against currency risks, according to the Korean Economic Daily.

Hana Financial Group confirmed the information above but declined to comment further.

The CVC Credit Partners European Mid-Market Solution Feeder Fund was launched in 2015 and had raised a total of $350 million by last week, according to an SEC filing. The target size of the master fund was undisclosed.

Under the current low interest rate environment, a lot of leading Korean investors are increasing their exposure to private debt. Earlier this year, South Korea’s Public Official Benefit Association (POBA) and the Government Employees Pension Service (GEPS) allocated a total of $120 million and $160 million respectively into private debt managers to invest in Europe and the US.

The London-headquartered private debt manager is the subsidiary of global private equity and investment advisory firm, CVC Capital Partners. As of February 2017, CVC Credit Partners managed 23 CLOs, seven of which are in Europe.