'Investment instincts' awaken at Skylake... Could Alteogen be the opening salvo? [fn Market Watch]

[Financial News] Skylake Equity Partners has geared up for another round of major investments. With a substantial portion of its 12th blind fund already deployed, the firm has begun putting to work newly secured dry powder in the 1 trillion won range, backed by the National Growth Fund. Its first investment target is Alteogen Inc.
The new investment platform can deploy up to 200 billion won per deal, turning the investment banking (IB) industry’s attention to what comes after Alteogen Inc. At a similar scale, it could make as many as five major investments. Whether Skylake, known for its strengths in artificial intelligence (AI), semiconductors, materials, parts and equipment, will expand its investment footprint into biotech is another key question.
According to investment banking (IB) industry sources on the 7th, Skylake recently established “SkyAlt” with the National Growth Fund and agreed to invest in 200 billion won worth of class shares issued by Alteogen Inc. Alteogen will issue 100 billion won each in convertible preferred shares (CPS) and redeemable convertible preferred shares (RCPS), both with five-year maturities. The RCPS issue price was set at a 10.3% premium to the reference price.
Skylake CEO Min Hyun-ki said, “Alteogen has built a competitive business model based on ALT-B4 that will enable it to expand its business in global markets and sustain growth,” adding, “We hope that, as the first portfolio company of this fund, it will secure new growth drivers and make the leap to become a global biotech company.” Skylake, which has approximately 3.5 trillion won in assets under management (AUM), was selected this year as an outsourced manager for the National Growth Fund’s large-scale track, securing about 200 billion won in policy funding. It reportedly secured a letter of commitment (LOC) for 1 trillion won less than a week after being selected. In effect, it has equipped itself with another investment platform in the 1 trillion won range.
An IB industry source said, “Given that it quickly attracted private capital using policy funding as seed money, the pace of future investment deployment is also likely to be quite fast.”
Skylake raised its 11th fund, worth 750 billion won, in 2020, followed in 2023 by its 12th fund, worth 1.2 trillion won—the first fund it had raised since its establishment to exceed 1 trillion won. A substantial portion of the 12th fund has also been deployed. Its key investments include AI semiconductor fabless company DEEPX, electronic tax invoice and SaaS company BusinessOn, battery manufacturer EcoPro BM, and semiconductor materials company Circuit Foil Luxembourg (CFL). DEEPX is a notable example: after reviewing numerous AI and semiconductor companies, Skylake invested at an early stage and became its second-largest shareholder.
Exits have also continued. After recovering its investments in Yanolja and Helinox, Skylake also successfully sold KDA, an auto parts manufacturer. It has once again secured investment capacity in the 1 trillion won range at a time when investment and exit activity across its existing portfolio are converging.
Another IB industry source added, “Since Skylake was founded by Chin Dae-je, former minister of Information and Communications, it has built expertise in IT, semiconductors, and materials, parts and equipment,” adding, “The key question is whether major investments will follow in growth industries such as AI, semiconductors and biotech, starting with Alteogen.”
[email protected] Kang Gu-gwi Reporter