이 기사는 2019년 12월 23일 08:00 thebell 에 표출된 기사입니다.

2019 was the first year for private equity firm Affirma Capital to stand alone from its parent Standard Chartered (SC) Group, as the more than seven-year spin-off process finally came to an end. Apart from completion of the spin-off, Affirma Capital had a busy year with its new investments and exits.

Standing on its own

Affirma Capital took its first step on its own in August, as the private equity unit under Standard Chartered Group in Southeast Asia, India, China, South Korea, the Middle East and Africa established an independent firm. Its assets under management stands at about five trillion won ($4.3 billion), with all assets under management of each region’s unit moved to the brand new firm.

In making investments, Affirma Capital not only uses each region's individual funds backed by local institutional investors, but also its Global Fund series formed mainly for principal investments, capitalizing on its global pool of capital. There have been four blind-pool funds launched by the Korean unit so far, with its fourth fund closed at 256 billion won ($220 million) in 2016. The Korean unit of Affirma Capital has recently started raising money for its fifth fund, aiming to close it by June of 2020.

Locking gains through partial exits

This year Affirma Capital made a partial exit from Hyundi AutoEver Corp, in which the private equity firm bought a 9.68 percent stake (two million shares) about three years ago from Hyundai Motor Group Chairman Chung Mong-koo.

In the company’s initial public offering (IPO) in March, Affirma Capital sold an approximately two percent stake, followed by selling another two percent stake five months later in a block transaction. With this partial exit as well as dividends, Affirma Capital succeeded to lock in more than 20 billion won ($17.2 million) of gains, generating 12 to 15 percent of an internal rate of return tentatively.

Affirma Capital also seeks to lock in gains through a recapitalization of its portfolio companies. One of such examples is Environment Management Corporation (EMC), formerly known as Kolon Water & Energy, in which the private equity firm acquired the entire stake from South Korean conglomerate Kolon Group in 2016.

Affirma Capital has been working on transforming the company – which used to focus on water management – into a provider of comprehensive environment management services. So far EMC has completed five bolt-on acquisitions, including waste management company WIK Green acquired in March.

Continuing to make investments

Affirma Capital also speeded up investment activity this year. Apart from several bolt-on acquisitions, the private equity firm bought Hwasung Cosmetics in May, which marks its first cosmetics portfolio. Hwasung, which specializes in color makeup products, is different from most of the cosmetics portfolio companies backed by other domestic private equity firms which focus on mask packs. Affirma Capital intends to help the company expand into overseas markets.

In August, Affirma Capital bought a minority stake in Tirupati Group, a nutraceuticals-focused contract research and manufacturing company in India, for $50 million. Affirma Capital’s Korean unit and Indian unit jointly invested in the company. With this investment, two Indian portfolios are currently included in the fourth fund of the Korean unit, along with B2B-based travel platform TBO Group.

As it did before being spun off, Affirma Capital plans to focus on mid to large-cap buyouts and mid-cap growth capital in Asian, African and the Middle East markets. In the coming year, which would mark a full year after its spin-off, the private equity firm is expected to further establish its investment style.

(By reporter Han Hee-yeon)