Koreas Hana Financial Teams Up With Chinas CIC For $850m Fund

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Korea’s banking giant Hana Financial Group is partnering with China’s sovereign wealth fund China Investment Corporation (CIC) to set up a W1 trillion ($850 million) cross-border fund.

A Korea Times report said the fund will be the first of its kind to be launched through a partnership between a Korean financial services firm and a foreign sovereign wealth fund.

A Hana official quoted in the report said the fund will be used to help Korean firms seeking business opportunities or expansion in China. Additionally, part of the corpus could also be used to assist Chinese companies that seek to enter the Korean market.

Details such as the fund’s launch date and final size are still being discussed, the official said. South Korea-based private equity funds MBK Partners, IMM Private Equity, and BlueRun have been approached to become co-managers of the cross-border fund.

The Hana official quoted in the report said the partnership is likely to boost the Korean financial firm’s presence abroad due to CIC’s substantial influence in the global financial market.

CIC boasts a corpus of $941 billion and has invested in several overseas companies ranging from home-sharing startup Airbnb and Canadian mining company Tech Resources to US private equity firm Blackstone.

It is also a shareholder in 17 Chinese state-owned financial institutions, including China Construction Bank Corp and Agricultural Bank of China.

Recently, the Chinese fund partnered with French asset management company BNP Paribas and Paris-listed Eurazeo to launch a €1-1.5 billion ($1.12-1.68 billion) fund to back European companies seeking to expand in China.

In December 2018, Hana Financial Group established Hana Ventures, a corporate venture capital (CVC) affiliate, for investment in venture companies, especially in the ICT and biotech fields. The group said Hana Ventures will create a Fourth Industrial Revolution fund worth $88.2 million with plans to invest W1 trillion ($882 million) into ICT, biotech, and healthcare sectors by 2021.