The private equity arm of Standard Chartered is set to invest in a number of South Korean companies in the next 18 months as it sees good potential for minority stake purchases in the environment industry.
Standard Chartered Private Equity, which manages $1.2 billion in assets in Asia, typically invests between $20 million and $50 million in a target company for a 5 to 45 percent stake, Charles Huh, who heads the South Korean subsidiary of the bank's private equity operations, said on Thursday.
We will be very busy executing deals ... (with) five to 10 more deals in the next 18 months, he told Reuters in an interview on the sidelines of an Asian Venture Capital Journal conference.
He said half of the target companies were related to the environment industry, but declined to identify them.
The private equity arm pumped $300 million to buy a 45 percent stake in a water treatment unit of Kolon Engineering & Construction in June. In 2007, it purchased a $230 million stake in South Korea's No. 3 life insurer, Kyobo Life Insurance.
It targets medium-sized business groups with assets of between 4 trillion won ($3.3 billion) and 10 trillion won ($8.3 billion), which are trying to have global presence.
Our goal is to invest half of a billion dollar in Asia a year, he said after recently launching its South Korean representative office.
The private equity unit keeps a close watch on water-related businesses and is also looking at non-banking financial services companies in South Korea. It prefers privately negotiated deals to bidding at auctions, as well as buying new shares in target companies.
Across Asia, the firm has invested in 27 companies, including 4 South Korean names. South Korea represents more than 25 percent of the total investments, he said.
The arrival of Standard Chartered Private Equity in Seoul comes after high-profile U.S. investment funds CVC and Warburg Pincus WP.UL withdrew from South Korea.
Private equity house Lone Star LS.UL has exited from most South Korean assets, after its two failed attempts to sell 51 percent of Korea Exchange Bank due to disputes over its South Korean activities.
But Huh said Standard Chartered viewed South Korea as attractive with substantial investment potential.
If we describe South Korea's private equity market as a 42 kilometer (26 mile) marathon, we are just done with 10 kilometers, he added.
(Editing by Muralikumar Anantharaman)