News & Analysis

Partners Group leads Korean restaurant GP-led

The $500m continuation fund marks the entry of one of Asia's largest buyout shops, MBK Capital, into the GP-led secondaries market.

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One of Asia’s largest private equity firms has used the secondaries market to hold onto a top-performing asset.

MBK Partners, which has $24.5 billion in assets under management, moved restaurant group BHC Group into a continuation fund anchored by Partners Group, according to a statement. Glendower Capital and Hamilton Lane were among the other backers of the deal advised by PJT Partners.

Around 75 percent of limited partners opted to sell, with Korean LPs making up a substantial proportion, Secondaries Investor understands. The continuation vehicle is worth just less than $500 million overall.

In December, Ontario Teachers’ Pension Plan paid 300 billion won ($275 million; €234 million) for a minority stake in BHC Group which valued the company at the equivalent of $1.7 billion, the Korean Economic Daily reported. It is understood that the secondaries deal was priced off this deal.

BHC Group owns South Korea’s second-largest fried chicken brand, as well as premium beef restaurant Changgo. It was originally acquired in 2018 by MBK Partners Special Situations Fund and today has 2,000 restaurants in its home market and Hong Kong.

“When MBK invested in business, it was not distressed; it was profitable but probably undermanaged,” said a source close to the deal. “They’ve managed to transform the business, really focusing a lot on profitability and innovation in menus to try and increase the average ticket spend per customer.”

Several large GP-led deals have closed or are ongoing in Asia this year. In May, Secondaries Investor reported that Goldman Sachs was backing a single-asset process centred on logistics firm GLC China, which could be up to $2 billion in size. Evercore is advising.

In August, NewQuest Partners backed a $460 million multi-asset continuation fund deal involving Kuala Lumpur-headquartered Navis Capital as part of a process run by Campbell Lutyens.

“The Asian market has seen between $7 billion and $8 billion of GP-led secondary dealflow over the past 12 months, which is significantly higher than the prior 12-month period,” NewQuest’s chief operating officer Bonnie Lo told Secondaries Investor in August.