[Exclusive] Did MBK Chairman Kim Byungjoo Participate in Homeplus Management?...Fund Articles Specify ‘Obligation’

Articles of Blind Fund Used for Homeplus Acquisition
Mandate Active Involvement in Management of Portfolio Companies
MBK: "Standard Duty of Good Faith, Not an Obligation to Manage Operations"

Kim Byungjoo, Chairman of MBK Partners, who responded during the last National Assembly audit that he was not involved in the management of Homeplus, was found to be obligated—according to the articles of association of some of the blind funds used for the Homeplus acquisition—to actively participate in managing the portfolio companies. There was also a requirement to retain eligibility for performance-based compensation. While this obligation may not have required day-to-day management of Homeplus, some argue that there may at least have been responsibility regarding major decisions. MBK Partners responded that this is the standard duty of good faith and diligence for blind funds, not a mandate to interfere in the daily operations of individual companies.

According to the “Articles of Association for MBK Partners Fund III-2,” submitted by the office of Park Sanghyuk, member of the Political Affairs Committee at the National Assembly, to the Financial Supervisory Service on October 7, Chairman Kim is designated as “key personnel.” Key personnel are core management staff within the General Partner (GP). According to the articles, there are six key personnel, including Chairman Kim; Vice Chairmen Yoon Jongha, Boo Jaehun, and Kim Gwangil; and two overseas members—then-partners Kong Tek Chien and Kung Kuo Chan.

The articles require key personnel to dedicate working hours and care to the fund. In particular, there is a duty to be involved in the operation of investee companies. The articles state, “At least five key personnel shall, irrespective of whether inside or outside the commitment period, actively participate in the operation of the company and investee companies.” As the five-person minimum is stipulated, Chairman Kim may technically be exempted from this duty, since the requirement can still be met without him. However, Kong Tek Chien and Kung Kuo Chan, the two foreign partners, were responsible for Greater China investments and likely resided abroad. Considering their overseas roles, it is difficult to see them as engaged in the management of a domestic portfolio company such as Homeplus. Still, if both Chairman Kim and the two foreign partners were excluded, this would violate the articles. Therefore, some experts argue that it would be more reasonable to count Chairman Kim among the five key personnel, along with one foreign partner.

Byungju Kim, Chairman of MBK Partners, appears as a witness at the National Assembly's Political Affairs Committee audit on the Fair Trade Commission, Personal Information Protection Commission, and others held on the 14th. 2025.10.14 Photo by Hyunmin Kim

Chairman Kim was also found to be entitled to receive performance-based compensation. The articles stipulate that “key personnel must retain the right to directly or indirectly receive at least 50% of the performance fees.” Performance fees are paid on any profits above the agreed hurdle rate, meaning they represent revenue gained from boosting company value. Furthermore, if key personnel violate the duties of participating in operation and retaining performance fee rights, management fees paid for undrawn capital commitments may be reduced or the commitment period may be suspended.

The Fund III-2, alongside Fund III, was a blind fund used by MBK to acquire companies including Homeplus. In blind funds, capital is raised before investment targets are determined. The obligations for involvement and performance-based compensation were expressly stated in Fund III-2, but not in Fund III.

MBK Partners maintained that this is standard language for blind funds and does not require managing the day-to-day operations of individual companies, but rather conscientious dedication. MBK stated, “The obligations to dedicate working hours and care are typical for blind funds, simply requiring the GP’s full dedication in good faith. This is intended to prohibit key personnel from spending time on matters unrelated to the blind fund or its investee companies.” MBK also emphasized that, given the fund invests in more than 10 companies, the portion of fund capital actually used to acquire Homeplus was relatively small—citing that Fund III’s direct equity stake in the Homeplus acquisition amounted to only KRW 500 billion, while the main capital of over KRW 2 trillion was raised through separate project funds such as co-investment vehicles or redeemable convertible preference shares (RCPS) invested by the National Pension Service.

Because the blind fund covers all of Asia, overseas partners are included among key personnel, and MBK said decisions about allocating fund and portfolio management work among key personnel are internal to the GP. Regarding Chairman Kim’s statement at last year’s legislative audit, MBK clarified that he meant he was not involved in the day-to-day operational management of individual investee companies such as Homeplus.

MBK asserted that this duty is also present in Fund III’s articles. While both Fund III and Fund III-2 are institution-only private equity funds for domestic investment and are de facto the same fund, the differing articles are due to the registration process for domestic compliance, while the full obligations appear in the master fund articles agreed with overseas limited partners.

However, some argue that it could be problematic if articles with the same purpose were submitted differently to the Financial Supervisory Service during the registration of domestic private equity funds. According to Article 249-10 of the Capital Markets Act, an institution-only PEF must submit an incorporation report including articles of association, and Article 446-43 provides that any person failing to file or filing false reports may face imprisonment of up to one year or a fine of up to KRW 30 million.

There are also interpretations that, while Chairman Kim may not have managed Homeplus on an everyday basis, he was nonetheless obligated to participate in major decisions at portfolio companies. On October 14, 2025, when asked by Democratic Party lawmaker Park Sanghyuk whether he participated in decision-making at Homeplus, Chairman Kim replied, “We are not a conglomerate, nor are we an owner family or a PEF operating company. Each of our 13 partners is responsible for their own area—my role is fundraising and managing investments that have received capital.” He also replied that he had no authority or involvement regarding questions about payment guarantees for suppliers, short-term bonds, or rehabilitation procedures.

Industry experts generally view such obligations, commonly included in blind fund articles, as declaratory—meant to ensure dedication to work, not to mandate active participation in daily corporate management. Nevertheless, given the role of private equity managers, some argue that key personnel do have a natural duty to be involved in portfolio company management. Regarding why otherwise identical funds have differing articles of association, it is speculated that this is due to both early industry practices of reusing prior fund templates and limited partner demands to include specific requirements.

Assemblyman Park Sanghyuk stated, “Although Chairman Kim Byungjoo indicated during last year’s National Assembly audit that Homeplus-related decisions were not under his authority, the articles for the Homeplus acquisition funds designate him as key personnel and require him to be actively involved in the management of portfolio companies. As his testimony and the articles are inconsistent, a thorough investigation into Chairman Kim’s involvement in Homeplus management is necessary.”

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