Recently, Sanpower Group and KTB Financial Investment Group (hereinafter referred to as “KTB”), a quasi-sovereign investment fund from South Korea, reached a basic consensus on the joint establishment of the Sino-ROK Industrial Investment Fund (hereinafter referred to as “the Fund”), and signed a letter of intent on October 14, 2014.

The Fund stresses the international context of the cooperation, with the total size expected to hit over $3 billion and the initial fund size no less than $100 million. Sanpower Group intends to contribute 30% of the fund size, while the remaining limited partner investment will be raised by KTB from South Korea. Currently, the potential limited partners (LPs) and strategic partners include such top financial and investment institutions in South Korea as social insurance, pension funds and banking institutions, etc., who mainly invest in retail, technology, healthcare, manufacturing and logistics companies.

KTB makes a strong push after three years

The Fund means to invest in China and South Korea’s enterprises that will hopefully promote the collaborative development of the two sides’ industry and trade. Meanwhile, it will harness Sanpower Group and KTB’s strength and social networks in China, with a view of introducing China’s outstanding enterprises and project resources to Korean companies, and facilitating the cooperation between companies from the two countries.

KTB, founded in 1981, was listed on the Korea Stock Exchange (KSE) in 1996. As South Korea’s quasi-sovereign investment fund, KTB has successfully managed 30 investment funds since it was founded 30 years ago, with the cumulative contribution of more than $1.9 billion. Currently it is South Korea’s fifth-largest private equity fund.

KTB has extensive experience in overseas investment. Since 2004, it has invested in more than 40 companies in China, with a total investment of over $400 million. The invested projects include China PCD Stores, Golden Meditech, Mindray (China’s largest R&D and manufacturer of medical equipment), Focus Media, Paradise (electric appliances), Pod Inns, etc., many among which have been successfully listed on the New York, NASDAQ, Hong Kong and Toronto stock exchanges.

Sanpower’s considerations

Financial and investment service has been one of Sanpower Group’s major developing sectors. Currently the Group boasts a host of financial companies, and is the largest private shareholder of numerous well-known financial institutions, including Huatai Securities, Bank of Jiangsu, etc., as well as the important partner for renowned international investment institutions in China, like SAIF, Sequoia Capital, etc.

“The establishment of the buyout fund has the far-reaching significance for Sanpower Group and KTB. Through this cooperation, our Group has deepened the development of its financial industry.” Sanpower Group also revealed that “the Group’s numerous overseas M&A projects (such as Fraser department store, Brookstone, Natali, etc.) can also expand their Korean market with the guide of KTB’s elite team.”

Sanpower Group believes that, since the industries which the Fund invests in have strong synergistic effect with Sanpower Group, the partnership will be beneficial for Sanpower to further nurture its industry, as well as find suitable acquisition targets. In the context of increasingly close cooperation between China and South Korea, Sanpower Group will predictably enhance its international reputation and competitiveness through cooperation with the Fund.