CVC Capital Partners has hired Steve Lim from JP Morgan to be its chairman in Korea at a time when buyouts are mushrooming in the country.
Lim will be based in Seoul. Prior to joining CVC, Lim was the chief executive and managing director of JP Morgan in Korea where he was also the member of the Asia-Pacific management committee.
A JP Morgan spokeswoman confirmed that Lim is leaving the US investment bank after a hand-over period. He has been replaced by Tae Jin Park as senior country officer and head of investment banking for Korea.
Korea has been an active and competitive buyout market with sizeable deals hitting the market. Last year the value of private equity investments in Korea climbed to $8.72 billion from $6.68 billion in 2013 according to data provider Dealogic. Most sales have been sold via auctions at steep earnings multiples.
Mid-last year CVC closed its fourth Asia fund at $3.5 billion, called CVC Capital Partners Asia Pacific IV LP for deals across Greater China, Korea, Japan and Southeast Asia.
CVC was among the private equity firms invited to bid for British retailer Tesco’s Korean unit Homeplus. However it is no longer in the running, according to a market source.
However since a string of deals in the early 2000s CVC became more conservative as prices rose sharply and there were few successful exits besides KKR's sale of Oriental Brewery.
Some private equity investments have also struggled such as MBK Partners' 2013 investment in clothing firm Nepa, according to a market source. Many deals have been dogged by disputes with unions.
In August last year CVC, led by Roy Kuan in Asia, acquired SRS Korea, the sole franchisee of KFC in Korea, for just $98 million.
The London-headquartered buyout firm has been invited to bid for other deals in Korea such as the sale of Tyco International’s Korean security system unit, but has been outbid by rivals. Carlyle acquired the business at an eye-popping 30 times free cash flow after tax and capital expenditure.
In the past it has invested in other Korean companies such as: WiniaMando, Haitai Confectionary, Mercury Corp, CJ CGV Co. and DM Foods.
CJ CGV was probably its biggest success in Korea to date, as it made 3.4 times CVC's investment. On DM Foods it made about two times its money and Haitai about three times.
One of its more troubled Korea-related deals was MagnaChip Semiconductor, which it bought as part of a consortium in 2004 for $828 million. The chipmaker filed for bankruptcy in 2009. However CVC only lost about $13 million on the deal as it recapped via a high yield bond.
Lim joins a team of professionals at CVC in Korea, including Yonghi Li, Ryan Tae and Chris An. CVC also has two professionals in Hong Kong, John Kim and Brian Hong, who work on Korean deals.
History of deal making
Lim and Park have worked closely together at JP Morgan and Park was clearly Lim's number two and destined to succeed him, according to a banker who has worked closely with both of them for over a decade on deals. The franchise has grown under their leadership.
Although both had high-level contacts throughout corporate Korea, Lim tended to work more closely with private equity firms and was more of an aggressive, market-savvy banker. Meanwhile Park, known as TJ, was a deeply-strategic M&A banker with local clients, the source said.
Since joining JP Morgan in 2001 Park has been responsible for corporate finance activities, covering Korean corporates, financial institutions, and government agencies as a senior client executive in the bank's global investment banking franchise.
He has also been the branch manager for JP Morgan Securities (Far East) Limited, Seoul Branch, and the member of the local management committee.
In his new role, Park will join JP Morgan's Asia Pacific Banking Management Committee and the Asia Pacific Management Committee.
He was in charge of landmark ECM transactions including the $1.1 billion IPO of Samsung SDS and the $1.4 billion IPO of Cheil Industries, both of which occurred last year. Park has been involved in some landmark deals such as the $7.2 billion sale of LG Card in 2006 and Samsung Card’s sale of a 17% stake in Samsung Everland to KCC in 2011.
He led numerous DCM transactions for Korean issuers, the most notable of which was Samsung Electronics’ $1 billion 144A/Reg S bond offering in 2012.
Before joining JP Morgan, Park worked for Deutsche Bank for 14 years, and was its head of global investment banking for Korea at the time of his departure.
JP Morgan under Lim has advised on some landmark private equity deals in Korea in recent years including ING Group’s sale of its Korean insurance operations for KRW1.84 trillion to MBK Partners which closed in 2014.
Prior to JP Morgan Lim worked in the investment banking division of Salomon Brothers in Seoul, Tokyo and New York. He also worked at Kidder Peabody and Procter & Gamble in the US.
Lim holds a BA from Korea University and an MBA from George Washington University.
This article was updated on August 15 to add context throughout
