This article was published on May 19, 2025, at 3:43 p.m. on the ChosunBiz MoneyMove site.
The Korea Teachers Credit Union's selection list for the 700 billion won blind private equity fund (PEF) management firm includes KCGI, known for the 'Kang Sung-bu Fund,' drawing attention to the background as KCGI has been eliminated multiple times from PEF management firm selection contests due to various controversies along with its 'activist label.'
According to the investment banking (IB) industry on the 19th, the Teachers Credit Union recently individually notified the news of the final selection of ten firms, including ▲JKL Partners ▲IMM Credit Solutions ▲Praxis Capital ▲KCGI ▲H&Q Korea ▲Premier Partners ▲Genesis PE ▲Eum Private Equity (PE) ▲LB Investment ▲Daol PE.
The most surprising management firm is KCGI. Since last year, KCGI has been engaging in funding projects with pension funds and credit unions to raise a blind fund of 500 billion won, but this is the first time it has been selected. Despite claiming to advocate activist funds, it has faced reputational risks due to instances of recouping investment funds from minority shareholders at companies like DB HiTek and Hanjin KAL.
In the case of the acquisition of Hanyang Securities, allegations of a 'parking deal' were raised from the start, and recently, the National Tax Service's tax investigation has compounded the eligibility controversy of major shareholders, delaying the acquisition itself. In 2021, noise continued as it had partnered with Edison Motors, which tried to manipulate stock prices under the pretext of acquiring Ssangyong Motor.
Despite various allegations, the background of the Teachers Credit Union reaching out to KCGI is said to be based on KCGI's promise not to use activist strategies. KCGI has reportedly judged that activism would be difficult to establish domestically after observing MBK Partners' struggles with acquiring management rights in Korea Zinc.
Additionally, KCGI's history of bringing high revenue to the Teachers Credit Union has been cited as one of the reasons for its selection. The Teachers Credit Union acted as the de facto anchor investor in its investment in LIG Nex1, which achieved an internal rate of return (IRR) of 46%. Earlier this year, it also participated in investments in Essex Solutions, a manufacturer of materials that facilitate the conversion between electrical energy and kinetic energy, part of LS Group.
A KCGI official noted, 'The high revenue achieved thus far has resulted in being selected as the management firm,' and added, 'The allegations raised in the market are things that did not actually happen, so there has not been any communication with the Teachers Credit Union.' A Teachers Credit Union official stated, 'It was selected based on scoring criteria after quantitative and qualitative assessments.'