Korea’s National Pension Service (NPS) and business juggernaut SK Group have reportedly joined forces to form a 1 trillion won ($860 million) fund to invest in Vietnam, according to Korean media reports.
The pension fund and SK Group are reportedly contributing 500 billion won each to the fund. SK Group is said to have invested in the fund through SK Southeast Asia Investment, a unit set up in 2018 for its Southeast Asia foray.
Korean private equity managers SKS PE and Stonebridge Capital are understood to have been selected as the general partners of the fund. Stonebridge Capital has previously backed Vietnamese real estate tech startup Propzy.
Last year, SK Group purchased a 9.4 per cent stake in Vietnam’s Masan Group for $470 million, before it paid $1 billion for a 6.1 per cent interest in Vingroup this year. Korean media reports said SK Group will likely extend its investments into these two Vietnamese giants through the partnership fund with NPS.
Vingroup and Masan recently announced the merger of their retail arms into a single entity, which will be run by Masan while Vingroup will remain a shareholder. Financial details of the merger were not disclosed, but it was said to pave way for Vietnam’s largest consumer platform.
South Korea is Vietnam’s largest trade partner and a top foreign direct investment (FDI) investor. The Southeast Asian country has also seen a spate of M&A deals and PE-VC investments involving South Korean investors.
According to the Vietnam Tech Investment Report by Cento Ventures and ESP Capital, 13 of the total 61 venture funds operating in the country in the first half of 2019 were South Korean. The group, the largest ahead of VCs from Singapore (11 funds), has grown from just one fund in 2015.
Both Mirae-Naver Growth Fund and GS Shop are limited partners in local VC funds and also make direct investments in Vietnamese companies.