"Our goal at J&N Private Equity is to become a '300-year company,' as SoftBank founder Masayoshi Son once described," said Lee Joon-sang, co-CEO of the firm.
While private equity funds often face criticism for stripping companies bare with borrowed money, proponents argue that corporate restructuring and business continuity would be impossible without them. J&N PE, now in its seventh year, has become one of the fastest firms to demonstrate the virtuous cycle of private equity investment.
In an interview with Seoul Economic Daily on December 14, Lee explained the background behind acquiring Hyundai Hims (460930.KQ), a shipbuilding block manufacturer. "In 2019, the shipbuilding industry was a sector investors avoided, but from my experience advising on Daewoo Shipbuilding & Marine Engineering, I predicted the industry would recover," he said.
Co-CEO Hyun Sang-jin recalled the fundraising process: "We secured capital commitments well exceeding 100 billion won by explaining Hyundai Hims's financial stability as a debt-free company and its solid profitability."
J&N PE acquired a 75% controlling stake in Hyundai Hims for 97.5 billion won when Hyundai Heavy Industries put the company up for sale as part of its restructuring efforts. The firm subsequently invested an additional 100 billion won to expand production capacity and acquire competitors to integrate into the business.
As the co-founders had anticipated, Hyundai Hims's operating profit surged fourfold from just 5.2 billion won in 2020 to 21.6 billion won in 2024. The company's enterprise value grew from approximately 130 billion won to a market capitalization of 700 billion won following its KOSDAQ listing, ahead of a planned exit.
Lee and Hyun are Seoul National University alumni who began their careers together at Anjin Deloitte, where they advised on M&A transactions for global private equity funds. "We went separate ways, joining different PEFs, but in 2019 we founded J&N PE with the vision of creating a firm that embodies 'J' from our names, along with 'Joy' and 'Justice,'" Hyun said. "Though we were a new firm, we were 'experienced rookies' who had secured National Pension Service commitments at Stick Investment and SG PE."
Starting with a first fund of approximately 100 billion won, J&N PE has grown its assets under management to 1.3 trillion won ($960 million), with investments in 32 portfolio companies. These range from major corporations including HD Hyundai Heavy Industries (329180.KS), CJ Corporation (001040.KS), Soulbrain (357780.KS), and APS Group (054620.KQ) to small and mid-sized enterprises.
Their approach centers on building trust by helping companies solve their challenges. "We start advising potential portfolio companies two to three years before investing, helping them respond to outside investment approaches, and we help controlling shareholders work through concerns they can't even discuss within their own organizations," Lee explained.
Maintaining relationships with portfolio companies through multiple investments is also part of their strategy. "Like with APS Group, we pursue a 'continuous reinvestment strategy,' investing up to six times in different subsidiaries within a single group," Hyun said. "This builds deep trust with portfolio companies and deepens our understanding of sector-specific risks."
Among J&N PE's portfolio companies, Jaeyoung Solutech overcame numerous crises including a workout program and the closure of the Kaesong Industrial Complex to grow into a global mid-sized company, delivering strong returns. Soulbrain Networks invested in a new electrolyte plant in Indiana, USA, and is now preparing for an IPO while posting solid results despite the current battery industry "chasm" of temporarily slowing demand.
"Some view private equity as a symbol of greed, but we want to align our interests with companies and bring positive change," Lee emphasized.
