Need To Know

South Korea To Double PE Allocation

The $35 billion Korea Investment Corp., South Korea’s sovereign wealth fund, intends to double its allocation to private markets over the next five years to 20 percent, reports Reuters, a sister news service to Buyouts. All of the limited partner’s commitments are made outside South Korea.

Chief Investment Officer Scott Kalb said that he does not believe this is the right time to commit to private equity or venture capital funds. However, he does feel it’s the right time for Korea Investment Corp. to invest in distressed debt and real estate.

As of June, 10 percent of the sovereign wealth fund’s total assets were in private market investments. Kalb said he expects total assets under management to increase by $5 billion to $10 billion per year. Korea Investment Corp. was created five years ago with capital from South Korea’s government and central bank.

Blackstone Accused Of Hiding Investments

The Blackstone Group asked the U.S. Second Circuit Court of Appeals in New York not to revive a lawsuit claiming the firm hid bad investments before its $4.7 billion initial public offering in 2007, Reuters reported.

The firm’s attorney, Bruce Angiolillo, a partner at Simpson Thacher & Bartlett LLP, argued that Blackstone was not legally required to reveal all the details of all its investments.

David Brower, a partner at Brower Piven PC and the attorney for the suing investors, said the suit should not have been dismissed in September 2009. “Blackstone has the obligation to report significantly negative, and even significantly positive, results. Numbers are always relevant when you’re talking about investments,” he said.

It is not clear when the court will make its ruling.

TPG Joins Yuan-Denominated Fund Fray

TPG has established the firm’s first two yuan-denominated funds, each of which has a target of RMB 5 billion ($740 million).

The firm will start fundraising for TPG China Partners I, based in Pudong New Area, a part of Shanghai, “in the next several months,” according to a press release. TPG will use the fund for investments in medium-sized and large Chinese businesses operating in financial services, consumer, retail and health care. A second, similar fund will be set up in China’s western city of Chongqing, reported Reuters.

TPG, which closed a $4.25 billion Asia fund in 2008, has been investing in the region for more than 15 years, and has more than 30 professionals there.

Some of TPG’s portfolio companies in China include China Grand Auto, Daphne, Lenovo, MI Energy, NT Pharma, ShangPharma, Shenzhen Development Bank, UniTrust Finance, WuMart and Yunnan Red Winery.

Meanwhile, The Carlyle Group has secured RMB 2.4 billion in commitments for its RMB 5 billion-targeted Beijing-based fund, The Carlyle Beijing RMB Fund, earmarked for investing in large Chinese companies with high growth prospects.

And about a year ago, Blackstone Group LP said it would initiate a RMB 5 billion-targeted fund to invest mainly in Shanghai, and, as of February, had received three commitments to the fund.