Coller Capital is backing what it says is the largest GP-led transaction to take place in Asia.
The London-headquartered secondaries buyer is co-leading a $1.5 billion single-asset continuation fund deal centred on Ssangyong, South Korea’s largest cement company by market share, according to a statement.
Coller invested alongside a group of co-investors and an unnamed global secondaries buyer, with general partner Hahn & Company also committing a “significant” amount of capital, the statement said.
A “considerable number” of investors also rolled over into the new vehicle, Hahn & Co chief executive Scott Hahn told Secondaries Investor via email, declining to share specifics.
Evercore is understood to have advised on the deal, which has been in the market for around a year.
Assets are typically transferred to single-asset vehicles under the assumption that they will continue to be successful under their existing business model. In this instance, Hahn intends to use the five-year life of the vehicle to transform Ssangyong into “Korea’s leading waste management group”, according to the statement.
Hahn & Co’s commitment marks the third time it has backed Ssangyong since acquiring a controlling 77 percent stake in 2016. Ssangyong was held in the 2014-vintage Hahn & Co Fund II, Hahn noted in the email. The firm had previously acquired smaller cement players in its 2011-vintage Fund I and control of Ssangyong in its successor to consolidate the industry.
According to a source with knowledge of the matter, Ssangyong is aiming to use plastic waste as feedstock in the production of cement, a role traditionally played by fossil fuels. The technology could eventually apply to other fossil-fuel-heavy industries such as power production, the source said.
South Korea’s government aims to reduce its plastic waste by 50 percent and recycle 70 percent of waste plastics by 2030, according to its website.
The deal is “evidence of how private equity firms can be successful, long-term owners of businesses with the ability to transform companies and industries”, Hahn said in the statement.
South Korea has been one of the more active Asian secondaries markets in recent years. In September, buyout shop MBK Partners moved restaurant business BHC Group into a continuation vehicle worth around $500 million. Partners Group led the deal, which PJT Partners advised on.
In May, Secondaries Investor reported that Affirma Capital, the former private equity arm of Standard Chartered Bank, was planning to make deal-by-deal investments in the South Korean GP-led market.
Coller Capital is investing its $9 billion Fund VIII, which closed in January 2021 and counts Maryland State Retirement and Pension System, Public School and Education Employee Retirement Systems of Missouri and Fubon Life Insurance among its investors.
– Alex Lynn contributed to this report.