STIC Investments mulls $1.6b second special situation fund: report

South Korean 10,000 won note is seen on U.S. 100 dollar notes in this picture illustration taken in Seoul, South Korea, December 15, 2015. REUTERS/Kim Hong-Ji

South Korean private equity firm STIC Investments is mulling $1.6 billion for a new special opportunities fund, STIC Special Situation Fund II, per a report on Private Equity International.

The firm has raised around $1.1 billion of the $1.3 billion Korean won-dominated portion of the vehicle, while targeting $300 million from international investors for a USD-denominated portion, the report said.

Meanwhile, its preceding fund was raised in 2016 at 603.2 billion won ($612.7 million) entirely from domestic limited partners.

The $586-billion National Pension Service of Korea was said to be an anchor investor in the second vehicle.

Private Equity International also said that STIC introduced a catch-up provision that was not available in Fund I. It will include a 1.3 per cent management fee, 20 per cent carried interest and an 8 per cent hurdle rate, compared to a 0.8 per cent management fee in its predecessor.

The Korean-headquartered firm typically does financial restructuring, carve-outs or family succession deals targeting minority or 100 per cent stakes from controlling shareholders in local business.

STIC Special Situation Fund II, which has been on the road since September last year, will reach a first close later this month and a final close by the end of this year, the report said.

Also in 2018, STIC raised its fourth pan-Asia growth equity fund, spun off its venture capital arm to form STIC Ventures, and launched real estate fund STIC Alternative, according to its website.

Following the spin-off of STIC Ventures, the firm had over 4 trillion won in assets under management compared to the 4.93 trillion AUM previously. Private equity accounts for 30.5 per cent of the current AUM, while special situations accounts for 34.5 per cent and M&A accounts for the remaining.

STIC Investments has also stepped up Southeast Asia footprints with a new office in Jakarta in addition to presence in Ho Chi Minh City. It also has offices in Taipei, Shanghai and Hong Kong.