Video Summary
Revolutionizing Private Equity Funds: A Strategic Perspective
Introduction
Explore the strategic decision-making and industry analysis in the world of private equity funds. Understand the vital role of private equity firms like Vig Partners in enhancing corporate value.
In-depth Look at CEO Park Byeong-moo and VIG Partners
- Kim Kyung-do, the host of The Q, introduces CEO Park Byeong-moo, the CEO of VIG Partners, a significant player in the private equity fund industry. CEO Park Byeong-moo shares insights into his journey, from excelling academically to his innovative strategies in the private equity sector. He discusses the success stories of companies like Dongshin and Enter under his leadership, showcasing his ability to add value and drive growth. Moreover, CEO Park Byeong-moo sheds light on his contrarian approach to investments, sharing how his out-of-the-box thinking led to remarkable achievements, such as the transformation of Hanaro Telecom into a profitable entity. He also elaborates on the evolution of private equity funds in Korea, emphasizing the positive impact they have on the economy and corporate governance. With extensive experience in the consumer goods industry, CEO Park Byeong-moo exemplifies the strategic collaboration between private equity funds and companies to enhance corporate value.
Resilience and Growth: The Story of Eastar Jet’s Success
- look at Eastar Jet, which recently came out as the best with a positive role for the judicial fund, in fact, Eastar Jet has been doing well for two and a half to three years through the coronavirus. We went through this very difficult process of not being able to fly, more than half of the employees were laid off, and the number of nearly 20 planes was reduced to 3, but the biggest thing was that we couldn’t raise capital, so now we’ve lost most of the money, which is close to 140 billion won. We expanded our capital by putting it into Insta Air, and now the Ministry of Land, Infrastructure and Transport has given us permission quickly, so we invested money in March at the end of January, but at the end of February, the operation permit was issued, and we took our first flight on March 26th. So now, actually, I saw a newspaper article at that time, and when the first plane took off, a lot of our employees went, and a lot of Eastar Jet employees came out. It was really touching to hear that story at that time. In fact, we are investing, but those things are very good. I think it’s rewarding. The company survives, and eventually the employees get better, and then with Insta Air starting again, consumers have various options. In fact, I think it was a company that could have gone bankrupt if it weren’t for investors like us. It is much better if you do so. It can be seen as playing a role in sufficiently increasing corporate value by managing and growing companies that have essentially good qualities. Yes, and in addition, we are now gradually building up management know-how. But in fact, When you say it’s the Midas touch, doesn’t that mean that the corporate value of each company that has done M&A like this has increased significantly and the shareholders have increased? Thank you for looking at it that way. In fact, 23 actually, it wasn’t that bad overall, and now what we’re pursuing is It’s a stable profit, but in fact, if you remember, it’s been almost 10 years since I invested in a [music] company. But while investing, I invested a lot of finances, but in fact, LG Suite was later acquired by SK. It became a very profitable company. It was a wafer manufacturing company, and when we invested, we went backwards from the semiconductor cycle, and now, as we go through the financial crisis and the Southern European crisis, the economy has actually deteriorated. At that time, when we invested, we even went into acquisition financing. In fact, there was a time when the acquisition finance group defaulted, and it was such a waste, but in fact, it was already 10 years ago and I didn’t have much experience in Korea’s financial industry or private equity funds, so I didn’t know how to overcome it, but these days, I didn’t know how to overcome it. If it were the same, in fact, if you think about it now, I think there would have been many ways to overcome it better. You are the owner of 26 companies, and you are the chairman of a large conglomerate group. In fact, you may look at it that way, but now in fact, the conglomerate and we are the owners of 26 companies. The biggest difference with private equity funds is that if there are 26 large corporations, they are treated as one group. But now, private equity funds have different investments for each fund, so they only think about the corporate value of the invested company. Even if there are 26 companies, a company is not. We do not support company B or anything like that. We really take the governance structure home very transparently and try to save only the company or increase its value, so in that respect, it is a little different from large conglomerates and is not an octopus. I don’t think you’ll keep it forever, but you can sell it back after 4-5 or 5-6 years or find the owner, so I think it’s very wrong in that respect. When selecting a company to invest in, it’s a bit different from the office fund, which is very different. We say that we consider contrarian investment to be very important. What does that mean? In fact, we should not brag about this in the VIP section anymore, but we now have a reputation in the industry and what we think we have done well is always ahead of others. Let’s start. If you invest because everyone says this is good, you may get good results, but the rate of return may be lower than the market, so let’s think about it backwards. So, in all cases, we have the brokerage do this. There have been many cases so far where we study the macro first and then take pictures of the company and contact them first. Among them, Free Life is a mutual aid company, and now it is the largest mutual aid company in Korea. Assets: You might be a little surprised because the mutual aid company’s assets are 2.3 trillion won. Next, the advance payment is 2 trillion won and there are 2 million subscribers. In fact, there were many twists and turns until it came to this. We first met the mutual aid company in 2015. At that time, there were about 300 mutual aid companies, and with the aging population, mutual aid companies were growing overseas, but in our country, it was so crowded that, as you can probably see if you look at the newspapers, there were a lot of scandals like embezzlement, breach of trust, etc., so people were worried. There was a lot of distrust, but it is an industry that needs to develop, but there are many sparks. If so, wouldn’t it be possible to develop if we create a good governance structure, strengthen capital expansion, and give trust? We started out with 300 companies in 2016. We invested for the first time in 2018 and merged 7 and 8 of them. The last of them is that in 2020, we combined Free Life and changed the name to Free Life, so people initially thought that when we invested in mutual aid companies, the conditions were messy. I started out, but as a result, in a way, it has become an investment target that others envy among investment people. In fact, there are many such things. In the case of Instagram Airways, you may know that, but there are people who feel a little uncomfortable about Instagram. There are many people, but even back then, if you look closely, we thought, “If we expand our capital, we can grow significantly, it can be good, and it can be rewarding. For example, I think Burger King was also such a contrarian investment. So, in 2008. Then the financial crisis came and it all happened. You should probably look at the newspapers at the time, but it was a very bad time for these FMBs and franchise chains. At one time, it was very popular in 2000, so how on earth would it be possible for us to take over this? So Doosan also tried to take it off. But now, in my opinion, when the economic environment was bad, people eventually started to eat these things, and then the second part is an interesting story, but I really like hamburgers. I like hamburgers, but the problem is not because I like them, but because I like them. Young people like it, but they are getting older. So, I thought that people who were in their 20s in the 2000s would like hamburgers in their 30s and 40s. So, people also like this very much.
Revolutionizing Private Equity Funds: A Strategic Perspective
- In the world of private equity funds, strategic decision-making is paramount for success. As we analyze the industry landscape, considering macroeconomic factors becomes crucial. It’s essential to evaluate the growth potential of the industry in which a company operates and assess the total market size. By understanding these dynamics, we can identify opportunities to enhance corporate value. This may involve international expansion, realignment towards online platforms, or even mergers to scale operations effectively. Ultimately, the goal is to develop a strategic direction that aligns with the micro-level objectives of the company. Private equity firms like Vig Partners play a pivotal role in this process by providing strategic analysis, planning, and executive appointments. Through meticulous monitoring and expert guidance, these firms contribute significantly to the growth and success of their portfolio companies. By leveraging a pool of experienced managers and outsourcing key functions, private equity funds optimize operational efficiencies. This strategic approach allows for effective decision-making and value creation, positioning these funds as integral players in the financial market.
The Evolution of Family Offices: A Comprehensive Overview
- In recent times, many successful individuals have amassed significant wealth through expanding their companies. These individuals, spread across the globe, have transitioned to establishing what is known as a family office, operating on a grand scale. With trillions at their disposal, these affluent individuals are attracting more like-minded individuals into the realm. The landscape in our country may have shifted slightly, but the United States, in particular, boasts a substantial school foundation. Currently, our composition leans towards a balance of domestic and overseas affairs, with investors holding diverse funds, including the National Pension Service and other financial institutions. Despite the complexity of these financial dealings, uniform conditions are set in place, ensuring consistency. Management fees are calculated as a percentage annually, with potential success fees for surpassing performance benchmarks. The formation of investment funds occurs based on agreed conditions, resulting in the creation of several substantial blind funds. These funds experience fluctuations in size, ranging from hundreds of billions to trillions, showcasing the dynamic nature of their operations. The investment cycle typically spans a decade, with allocations made over several years and subsequent recovery phases. The process entails intricate agreements on profit-sharing, performance fees, and reinvestments, ensuring a continuous cycle of growth and returns.
The Inspiring Journey of Park Byeong-moo, CEO of Vig Partners
- Park Byeong-moo, the CEO of Vig Partners, shares his remarkable journey of transforming Locus Holdings into a comprehensive entertainment company. By acquiring companies like Netmarble and IHQ Kim Jong-hak Production, he demonstrated a strategic vision that focused on benefiting investors and achieving actual results. Park emphasizes the importance of exceeding limits and thinking beyond conventional boundaries in corporate management. He reflects on the key skill of persuasion in the private equity fund industry, highlighting the significance of contrarian investments and strategic decision-making. Despite initial opposition, Park’s son follows a path of resilience and innovation, venturing into logistics with a business model akin to Uber. Looking ahead, Park envisions creating new funds and ensuring sustainable growth for Vig Partners, embodying a legacy of excellence and dedication.
Conclusion
Private equity funds play a crucial role in enhancing corporate value through strategic decision-making and expert guidance. Vig Partners exemplifies the success achieved through meticulous planning and value creation.