Fund Closes: H&Q Set to Close Debut Korea Fund –

H&Q Asia Pacific is nearing a final close for its debut Korea private equity fund, Korea Growth and Restructuring Fund LP.

Partners at San Francisco-based H&Q Asia Pacific, an affiliate of Chase Manhattan Corp., expect to round up a total of $101 million later this month. The fund had an original target of $80 million.

William Seymour, a senior managing director at H&Q Asia Pacific, said the fund will seek out general restructuring opportunities in South Korea. The fund may also co-invest with the firm’s main pan-Asia fund in South Korean deals.

H&Q has an office in Seoul staffed by six investment professionals, Seymour said.

In January, H&Q Asia Pacific held a final close on its most recent pan-Asia vehicle, the $750 million Asia Pacific Growth Fund III LP. Already, the firm has invested or committed roughly $500 million of that fund in a variety of deals, mostly in Japan and Korea. Seymour declined to discuss any individual deals.

The firm likely will begin raising Fund IV before the end of the year, Seymour said.

Last year, H&Q Asia Pacific was approached by what Seymour describes as a high-profile institutional investor, who requested that the firm form a private equity vehicle specifically for South Korean deals. Many industry professionals, including the managers of the recently formed Carlyle Group Asia fund, believe that South Korea holds the greatest promise for private equity investing in Asia now. The country is in the midst of recovering from a recession, and the government there is pressuring large conglomerates to sell off divisions.

H&Q Asia Pacific already owns a controlling stake in Good Morning Securities, a brokerage company it bought from Korea’s Ssangyong Group.

Partners at H&Q Asia Pacific debated bringing Korean investors into the fund, Seymour said, but found that most institutional investors there were financially constrained.