Mirae Asset Venture Investment: Bracing for Long Winter

On Dec 27, 2022

The author is an analyst of NH Investment & Securities. She can be reached at yd.yoon@nhqv.com. — Ed.

MAVI’s strong connection with Mirae Asset affiliates (securities, capital) should prove favorable when it comes to creation of new funds next year. MAVI is striving to defend its earnings both through AUM expansion and the deploying of various exit strategies.

Mirae Asset Group support to sustain next year

In 2022, Mirae Asset Venture Investment (MAVI) completed creation of eight funds (combined worth of W380bn), including a VC fund with Emart and a fund commissioned by the National Pension Service (NPS). Both of these funds share in common: 1) W100bn-or-larger AUM; 2) investment from Mirae affiliates; and 3) high general partner portions. MAVI plans to create a fund of W250bn next year, some of which is to be raised by Mirae Asset Securities.

In 3Q22, MAVI’s management fees for VC and PE funds expanded sharply to W9.9bn (+53.8% q-q). In line with a likely expansion in AUM next year, fund management fees are forecast to expand further. We note that MAVI could lessen earnings volatility by offsetting future valuation/disposal losses. We also point out that the firm has proved its capability in raising investment funds even amid a VC sector slowdown.

Secondary market stake selling is option if IPOs are not viable

MAVI’s major investment portfolio holdings include Moloco, Bucketplace, RIDI, Good Choice, Chrono24, and SemiFive. With the general partner portions in its VC funds standing at as high as 15~20%, MAVI looks well situated to enjoy sizable investment returns.

That said, with the IPO market slowing down, MAVI is known to be considering equity disposals in the secondary market. Investment recouping moves (in order to secure liquidity) are being witnessed across the industry. As of 3Q22, equity disposals accounted for 50.6% of domestic VC players’ investment recovery, far outstripping IPOs’ 25.6%. Moving ahead, this portion is likely to expand further.

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