Peter Thiel-backed Crescendo raises $1 billion blind fund [fn Market Watch]

[Financial News] Private equity firm Crescendo Equity Partners has successfully raised a $1 billion blind fund (about KRW 1.3 trillion). The move follows the formation of its first fund in 2015 with KRW 58.7 billion, its second in 2017 with KRW 413.1 billion, and its third in 2021 with KRW 1.1513 trillion.
According to investment banking industry sources on the 5th, Crescendo completed the first closing of the $1 billion Crescendo No. 4 Private Equity Partnership (its fourth blind fund). The fund’s $1 billion target is to be split between $500 million overseas and $500 million domestically. In particular, it has secured at least $350 million from global LPs (investors), exceeding 70% of its $500 million overseas target.
Given the participation of overseas LPs currently considering the fund, the overseas target is expected to be exceeded. Fundraising from domestic LPs is also expected to pick up, as due diligence by a number of major institutions is progressing smoothly.
Through the new fund, Crescendo plans to make buyout investments that acquire controlling stakes in domestic small and midsize technology companies with enterprise values of KRW 50 billion to KRW 500 billion. Amid rapid technological upheaval, including the recent expansion of AI, Crescendo is focusing on key areas the government is cultivating and supporting as next-generation strategic sectors at the national level, such as semiconductors, electronics and electrical equipment, B2B software, and cybersecurity.
The strong backing of Peter Thiel, a world-renowned IT investor and PayPal co-founder, is a unique competitive advantage for Crescendo. Thiel Capital executives participate directly in the investment committee, and Crescendo is actively driving its portfolio companies’ overseas expansion and cross-border M&A by leveraging Thiel’s global network.
Since its founding, Crescendo has invested a total of KRW 1.5162 trillion in 29 companies. It has not recorded a single loss of principal. The net internal rates of return (Net IRR) of Crescendo’s first three blind funds are performing exceptionally well, significantly exceeding the top-quartile threshold (top 25%) among global PEFs, based on the quartile rankings for global PEF net IRRs reported by global investment advisory and consulting firm Cambridge Associates for the first quarter of this year. To date, it has successfully managed 10 project funds and three blind funds. Its cumulative assets under management (AUM) amount to approximately KRW 1.8 trillion.
The second blind fund completed the sale of its investment in iText (PDF library software) to a company owned by a global technology-focused private equity firm. The investment is considered highly profitable, having returned at least the fund’s total principal. Through its first blind fund, Crescendo continues to realize investments across hardware and software, including semiconductors and electronics and electrical equipment. It has recorded a gross internal rate of return (Gross IRR) of at least 30% and a distributions-to-paid-in capital (DPI) ratio in the high 1x range.
Lee Gi-du, CEO of Crescendo Equity Partners, said, “Despite the domestic and international investment environment being more uncertain and challenging than ever, we were able to successfully complete the first closing of our fourth fund thanks to the steadfast trust of global institutional investors.” He added, “By combining Crescendo’s deep technological insight with our strong partnership with Peter Thiel and our global network, we will fulfill our role as a partner in helping competitive Korean technology companies make major strides on the world stage.”
[email protected] Kang Gu-gwi Reporter