The National Pension Service stated that it has decided not to participate in the hostile merger and acquisition (M&A) investment by MBK Partners.

A view of the National Pension Service Fund Management Headquarters located in Jeonju, Jeollabuk-do. / Courtesy of National Pension Service
A view of the National Pension Service Fund Management Headquarters located in Jeonju, Jeollabuk-do. / Courtesy of National Pension Service

The National Pension Fund Management Headquarters said on the 17th that it signed a final contract in February of this year, including the content that it would not participate in hostile M&A investments, regarding MBK, one of the private entrusted management companies. It added that it is reviewing whether to reflect this in future private fund contracts (such as articles of incorporation).

According to the investment banking (IB) industry, the National Pension Service decided to invest approximately 300 billion won in MBK's new 6th blind fund that is being formed, as of the 21st of last month. This information came amid ongoing controversies following the Korea Zinc management dispute and Homeplus's application for court receivership, leading to much speculation. This is interpreted as the reason why the National Pension Service unusually took the initiative to clarify the individual investment matter.

However, the National Pension Service reported that in July of last year, it selected the top four out of 15 management companies through a comprehensive selection process for domestic private investment entrusted management companies, and one of them is MBK. It is customary for contracts related to entrusted management to be signed within 2 to 3 months after the final selection of management companies, provided there are no special issues.

However, the National Pension Service explained that in the case of the selected management company (MBK), there were ongoing concerns that some management strategies, including the controversial hostile M&A investment related to Korea Zinc, did not align with the direction of the National Pension Fund's management. Accordingly, it conducted a review of case studies concerning hostile M&A investments and sought legal advice.

Based on the results, the National Pension Service stated that considerable time was spent continuously negotiating and coordinating with MBK. This is the reason the final contract was made in February of this year. The National Pension Service added, "During this process, various discussions and consultations were held with the domestic private investment industry as a whole."