Institution-Only PEFs Invested 28 Trillion Won Last Year... Rise in Non-Management Participation-Type Targeting Mid-Risk, Mid-Return

2025 Status of Institution-Only Private Equity Fund Management
Management Participation-Type Investments Decline Amid M&A Market Slowdown

Last year, the investment execution volume of institution-only private equity funds (PEFs) rose from the 24 trillion won range to around 28 trillion won. Due to a slowdown in the growth of the mergers and acquisitions (M&A) market, management participation-type investments decreased, while non-management participation-type investments targeting mid-risk, mid-return are on the rise.

According to the "2025 Status of Institution-Only Private Equity Fund Management" released by the Financial Supervisory Service on June 17, 2026, the investment scale of institution-only PEFs last year reached 28.1 trillion won, marking a 12.0% increase compared to the previous year.

Of this, management participation-type investments amounted to 23.7 trillion won, targeted at 301 domestic and 42 overseas companies. The volume of management participation-type investments has been on a decline, following 32.5 trillion won in 2023 and 24.1 trillion won in 2024, due to the slowdown in the M&A market.

By industry, manufacturing accounted for the largest investment at 15.5 trillion won, followed by electricity and gas supply (1.3 trillion won), and transportation and warehousing (1.2 trillion won). However, unexecuted committed capital rose by 7.1 trillion won year-on-year to 43.2 trillion won, indicating that a cautious investment stance is being maintained amid economic uncertainty.

For non-management participation-type investments, a total of 4.4 trillion won was executed across 90 funds. The investment volume for non-management participation-type funds has been rising, from 300 billion won in 2023 to 1 trillion won in 2024.

By investment target, corporate loans accounted for 1.4 trillion won, mezzanine at 1.2 trillion won, real estate and infrastructure at 600 billion won, and minority equity acquisitions at 500 billion won. It is analyzed that, due to the slowdown in the M&A market, investment is shifting from equity to mid-risk, mid-return assets such as loans and mezzanine instruments.

Last year, the recovery amount from institution-only PEFs reached 20.6 trillion won, up 11.4% from the previous year. Interim recoveries, such as third-party sales, amounted to 6.7 trillion won, while final recoveries through M&A and similar means reached 13.9 trillion won.

The domestic institution-only PEF market is expanding. Last year, there were 1,195 institution-only PEFs, 58 more than the previous year. The total committed capital of these PEFs was 167.5 trillion won, with total executed capital reaching 124.3 trillion won. The number of newly established institution-only PEFs increased by 38 to 211 last year.

The number of general partners (GPs) rose by 18 during the same period, reaching 455. Among them, there are 45 large GPs with committed capital of 300 billion won or more, 163 medium-sized GPs with between 100 billion and 300 billion won, and 247 small GPs with less than 100 billion won.

An official from the Financial Supervisory Service stated, "We plan to guide the industry so that sound and transparent market order and investment practices can become established."

This content was produced with the assistance of AI translation services.