▲ Financial Supervisory Service
Investment execution by domestic institutional private equity funds (PEFs) returned to an upward trend last year, with a significant expansion in non-management participation investments.
According to the "2025 Status and Implications of Institutional Private Equity Fund Operations" report released by the Financial Supervisory Service (FSS) on Wednesday (June 17), investment execution reached 28.1 trillion won last year, an increase of 12.0% from the previous year.
This marks a rebound following a sharp decline from 32.8 trillion won in 2023 to 25.1 trillion won in 2024.
While management participation investments saw a slight decrease to 23.7 trillion won, non-management participation investments surged to 4.4 trillion won.
In particular, 90 non-management participation PEFs executed a total of 4.4 trillion won in investments, marking a 246.2% increase in the number of funds and a 340.0% increase in investment volume compared to the previous year.
By investment type, corporate loans (1.4 trillion won) and mezzanine financing (1.2 trillion won) accounted for more than half, followed by real estate and infrastructure (600 billion won) and minority stake acquisitions (500 billion won).
The FSS analyzed that "this reflects the demand to invest in medium-risk, medium-return assets through loans and mezzanine structures, moving away from traditional equity investments due to the slowdown in the mergers and acquisitions (M&A) market."
For management participation, 22.4 trillion won was invested in 301 domestic entities, and 1.3 trillion won was invested in 42 overseas entities.
Manufacturing investments (15.5 trillion won) led the way, followed by electricity and gas supply (1.3 trillion won) and transportation and warehousing (1.2 trillion won).
Uncalled capital, which indicates additional investment capacity, stood at 43.2 trillion won, up 19.7% from the previous year.
This is interpreted as a result of a cautious investment stance amid persistent global economic uncertainty.
The volume of investment exits reached 20.6 trillion won, an 11.4% increase from the previous year.
Meanwhile, as of the end of last year, the total number of domestic institutional PEFs was 1,195, a 5.1% increase from the previous year.
Committed capital reached 167.5 trillion won, and invested capital reached 124.3 trillion won, increasing by 9.0% and 5.8%, respectively.
The number of general partners (GPs) managing PEFs increased by 4.1% to 455 firms compared to the previous year. However, polarization within the market has intensified, as only the share of large-scale GPs increased in terms of committed capital.
The proportion of funds managed by large-scale GPs has steadily increased from 60.4% in 2022 to 68.7% in 2025.
The FSS projected that "the domestic institutional PEF market is expected to continue growing as the number of funds, committed capital, and invested capital are all increasing, with significant additional investment capacity," adding that "competition is expected to intensify gradually due to the preference for large-scale GPs and the influx of new GPs."
The FSS further stated, "We will provide guidance to ensure that market order and investment practices are established, with the industry considering not only its inherent roles such as fostering new growth industries and improving corporate structures but also its social responsibilities."
※ Please note: This article was translated by AI and may contain errors.