Crescendo Equity Partners, a technology-focused private equity firm backed by PayPal co-founder Peter Thiel, has secured more than $350 million from overseas investors in the first closing of its fourth buyout fund, targeting $1 billion to acquire controlling stakes in Korean technology companies.
The firm said Thursday that it had raised more than 70 percent of its $500 million overseas fundraising target since launching the fund earlier this year. It aims to raise another $500 million from Korean investors, with due diligence currently underway.
Crescendo expects overseas commitments to exceed its original target as it continues discussions with additional institutional investors.
Crescendo Fund IV will focus on buyouts of Korean small and midsized technology companies valued at 50 billion won to 500 billion won ($37 million to $370 million), particularly in semiconductors, electronics, business-to-business software and cybersecurity.
The firm specializes in identifying Korean technology companies with strong domestic market positions but limited global reach, helping them scale up and expand their overseas market share.
Established in 2012 through a partnership between Thiel and CEO Lee Gi-doo, Crescendo has invested in companies including HPSP, Seojin System and Hanmi Semiconductor.
Executives from Thiel Capital participate directly in Crescendo's investment committee, while Thiel's global network supports portfolio companies' international expansion.
Since its establishment, Crescendo has invested 1.52 trillion won across 29 companies without recording any losses of invested principal, according to the firm. It has managed three blind funds and 10 project funds, with cumulative assets under management of approximately 1.8 trillion won.
Its first blind fund generated a gross internal rate of return exceeding 30 percent and a distribution-to-paid-in capital ratio in the upper 1x range.
Through its second fund, Crescendo invested in PDF software provider iText, whose subsequent sale to a company owned by another global technology-focused private equity firm helped the fund recover more than its total invested capital.
The firm raised $1 billion for its third blind fund in 2021, expanding its portfolio into artificial intelligence, biotechnology and cybersecurity. Investments include Medipost, voice security software company Fonexia and AI contact center provider Mindwareworks.
"Despite the uncertain and challenging investment environment at home and abroad, we successfully completed the first close of our fourth fund thanks to the continued trust of global institutional investors," Lee said.
He pledged to leverage Crescendo's technology expertise and partnership with Thiel to help competitive Korean technology companies expand globally.
ch0221@heraldcorp.com
