As the mergers and acquisitions (M&A) market slowed last year, investment methods of institutional private equity funds (PEFs) diversified. While the size of traditional management-participation investments fell slightly, non-management-participation investments such as corporate loans and mezzanine investments increased sharply.
According to "2025 status and implications of institutional private equity funds," which the Financial Supervisory Service released on the 17th, the size of management-participation investments by institutional PEFs last year was 23.7 trillion won, down 400 billion won from a year earlier.
By industry, manufacturing investments were the largest at 15.5 trillion won (65.4%). Electricity and gas supply (5.5%) and transportation and warehousing (5.1%) followed. By region, domestic investments accounted for 94.5%.
In contrast, the size of non-management-participation investments surged to 4.4 trillion won, up 3.4 trillion won (340%) from a year earlier. By investment target, corporate loans accounted for the largest share at 1.4 trillion won (32.3%), followed by mezzanine at 1.2 trillion won (27.6%), real estate and infrastructure at 600 billion won (14.9%), and minority-stake investments at 500 billion won (11.2%).
The Financial Supervisory Service (FSS) said, "In line with the slowdown in the M&A market, demand has shifted from traditional equity investments to medium-risk, medium-return asset through loans and mezzanine structures."
Meanwhile, as of the end of last year, there were 1,195 domestic institutional PEFs, up 58 (5.1%) from the end of the previous year. General partners (GPs) operating PEFs also increased by 18 firms (4.1%) from a year earlier to 455.
Committed capital totaled 167.5 trillion won, up 13.9 trillion won (9.0%) from a year earlier, and invested capital reached 124.3 trillion won, up 6.8 trillion won (5.8%). Last year's investment execution came to 28.1 trillion won, up 3 trillion won (12.0%) from a year earlier, while exits totaled 20.6 trillion won, up 2.1 trillion won (11.4%).