[In-Depth Look at Major VCs]⑤TS Investment Scales Up to KRW 1.4 Trillion Through M&A, Not Just IPOs

Track Record Built Through Active M&A
Growth Into a 1.4 Trillion Won AUM House
Challenges Ahead: Enhancing VC Presence and Management Systems

Editor's NoteA record amount of capital is currently flooding into the venture investment market. As large-scale government policy funds are activated in earnest, major venture capital firms (VCs) are rapidly scaling up as well. However, increasing the amount of money available and managing it well are two separate issues. Over the course of 11 installments, our publication provides an in-depth analysis of the trends in the VC market and Korea’s major domestic VC firms. We selected houses at the top in terms of assets under management (AUM), excluding those where private equity (PE) accounts for a large share. After taking a comprehensive look at the entire market, we delve into each company’s growth trajectory, flagship portfolio, investment philosophy and decision-making structure, as well as key figures and organizational culture.

24 billion won turned into 80 billion won. This is the exit performance that TS Investment achieved last year with Korea's No. 1 funeral service company, Preed Life. Through two M&A (mergers and acquisitions) funds in 2017 and 2020, the company invested 12 billion won each and later sold existing shares and collected dividends during the sale to Woongjin Group, thereby recouping more than three times the original investment.

According to the corporate value enhancement plan released last month, TS Investment’s assets under management (AUM) stand at approximately 1.4 trillion won and its total cumulative fund formation amounts to 1.5841 trillion won. The company operates 15 active investment partnerships, while the average internal rate of return (IRR) for 10 funds that have already been liquidated is 18.9 percent. The average IRR for M&A and secondary funds is also 16.7 percent. A representative of TS Investment stated, “The current fundraising process is nearly complete,” adding, “Once the remaining initiatives are finalized, our AUM could increase to around 1.5 trillion won by the end of the year.”

Starting as a CRC M&A House… Expanding Territory to Corporate Succession

TS Investment began in 2008 as a corporate restructuring company (CRC), grew its business by focusing on M&A for small and venture companies, and is now a listed venture capital firm (VC) on the KOSDAQ market since 2016. In addition to traditional VC investment, which involves discovering startups and awaiting their IPO, the company has built competitiveness in M&A and buyouts by securing major equity stakes and taking part in management to enhance corporate value.

Teezen, a tea and kombucha company, is a well-known example of TS Investment’s M&A investment achievements. In 2018, TS Investment, together with IBK Industrial Bank of Korea, acquired Teezen and subsequently sold it to VIG Partners in 2022. The company’s enterprise value, which was around 30 billion won at the time of investment, rose to over 100 billion won at the time of sale, and the return on investment, including dividends, reached approximately 3.7 times the original amount.

TS Investment highlights the ability to discover companies with a stable business foundation and growth potential, then participate in management to enhance corporate value, as the strength of its M&A investment strategy.

Corporate succession has been identified as the next new M&A growth engine. Earlier this year, TS Investment was selected as a general partner (GP) in the corporate succession M&A field for the Korea Growth Investment Fund project, securing 40 billion won in government fund contributions. The fund, which will be formed at a minimum of 100 billion won, is now in the final stages of creation. Rather than viewing corporate succession as a single industrial sector, the company approaches it as an investment method under M&A. The plan is to discover companies with growth and technological competitiveness from among those with succession demand, and to combine this with the company’s existing scaling up and deep tech investment capabilities.

From Early-Stage Discovery to Secondary Investments: Broadening the VC Value Chain

In addition to being active as a growth-stage venture capital, the company is also expanding its investment reach to secondary markets. Building on a history of steady investment in the bio sector, TS Investment has extended into deep tech, AI, and robotics. The company’s strategy is not to predetermine specific industries for investment, but rather to make decisions based on a company’s growth potential and value chain.

TS Investment has already accumulated a significant venture investment track record by investing in firms such as Dunamu, Krafton, Fastfive, RIDI, Sillicontwo, and AprilBio. In Sillicontwo, the company achieved an exit that was more than six times the investment amount, and recently, by divesting some shares in FuriosaAI, TS Investment recorded an approximate sevenfold return compared to the principal investment.

In 2023, the company established the ‘TS 15th Scaling Up Investment Partnership’ worth 110 billion won, and last year, added a 15.5 billion won proptech fund and a 39.7 billion won cultural technology fund. A 123 billion won ‘TS 17th Secondary Investment Partnership’ was also created to acquire shares held by existing venture investors. Thus, in M&A and buyouts, TS Investment is diversifying investment methods to include direct investments in growing companies, specific industries, and secondary markets.

The early-stage startup sector is complemented by its accelerator (AC) subsidiary, New Paradigm Investment. In 2019, TS Investment acquired managerial control of New Paradigm by investing 3 billion won. New Paradigm is in charge of sourcing and nurturing early-stage companies, and subsequently linking them with TS Investment’s growth-stage investments and M&A/exit capacity.

New Paradigm invested a total of 6 billion won in 14 startups in 2024. Of this, 2.1 billion won was committed to six newly discovered companies, and the other 3.9 billion won went to follow-up investments in eight companies. For TS Investment, adding the early-stage discovery function to its portfolio, which was previously focused on M&A and late-stage investments, means it now has an investment framework that encompasses seed, late-stage growth, M&A, and secondary investments.

End of the Founder Era, Shift to Professional Management... The Opening of 'TS 2.0'

The company began a generational turnover in management. In March, Lee Dong-hyun, former CEO of Shinhan Venture Investment, was appointed as the new CEO. With founder Kim Woong, who had led the company since its establishment in 2008, stepping down from the CEO role, TS Investment shifted to a professional management structure.

Roles have been divided according to expertise. CEO Lee Dong-hyun oversees all company management as CEO and chairman of the board, also heading the VC business, while Hwang Jeong-hyeon, head of M&A investments, is responsible for M&A. CEO Lee has a long history in venture investment at Shinhan Venture Investment and its predecessor, Neoplux; Hwang built his M&A and buyout experience at the private equity department of IBK Industrial Bank of Korea. Internally, the company refers to the changes following the management reshuffle as ‘TS 2.0.’

The challenges for the new system are clear. Under Lee’s leadership, the company must continue achieving strong venture investment results, foster new flagship portfolios in AI, deep tech, and bio fields, and ensure effective connection between New Paradigm’s early-stage investment and TS’s own growth-stage investment activities.

An organization and management system capable of supporting the expanded 1 trillion won-level scale is also necessary. According to public data, there are currently 16 professional investment managers. With 15 investment partnerships under management, and as deal sourcing and post-investment management efforts expand, the company is moving to hire additional staff and further advance its investment asset management system.

Performance and shareholder value volatility are further issues that need to be addressed. In 2024, the company recorded a loss due to the impact of investment asset revaluations, but returned to profitability last year. As requirements for designating stocks as being under administrative control have been tightened for companies with share prices below 1,000 won, the company held an extraordinary shareholders’ meeting in May to approve a 2-to-1 reverse stock split. In the corporate value enhancement plan released two months later, the price-to-book ratio (PBR) presented by the company was approximately 0.4. TS Investment announced plans to raise the PBR to at least 1 by 2028. This goal is only achievable if cash-confirmed exit performances, like those seen in Preed Life, continue.

A TS Investment representative commented, “We are exploring new avenues for open innovation and sustainable growth,” and added, “The current focus is on establishing management stability while creating the foundation for a quantum leap forward.”

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