KKR may have seen its fare share of opponents during its 39 years, but in its bid to snap up Tesco’s Korean unit – Homeplus – it might have found itself slightly outgunned.
According to Asia Asset Management, the venerable PE firm is now facing a consortium of gargantuan sovereign wealth and pension funds, namely South Korea’s mammoth National Pension Service (NPS), Singapore’s colossal Temasek Holdings, and Canada’s enormous Canada Pension Plan (CPP), all of which have teamed up with Seoul-based private equity firm MBK Partners to make a bid for Homeplus.
This is apparently the first time the NPS – the world’s fourth largest pension fund – has done a club deal with a domestic Korean PE firm, and should underscore how serious it is in its push to diversify itself through the alternative investment space.
As for Homeplus, while it reportedly made $5.95 billion in 2014, growing competition has led its franchise sales to dwindle the past two years, leading Tesco to shop around for a suitable buyer.
Now going back to KKR, its $102 billion in AUM may now seem tiny compared to the trillion dollar warchest its opponents are carrying, but with Homeplus valued at just $5.88 billion, chances are, it might just come out of this as the winner.
Stay tuned.
Photo: More Good Foundation