Affirma Capital's virtuous cycle: exits, new bets and a rising fund [House Review]

The defining theme of Affirma Capital's 2026 is a virtuous cycle. Building on a string of successful exits across diverse industries, the firm has moved to raise its next blind fund. The capital secured will go toward acquiring new companies and supporting the growth of existing portfolio firms. Its investment toolkit has also grown more varied, spanning growth capital and special situations strategies.

Forming a continuous loop — invest, add value, exit, fundraise — is the fundamental discipline of any private equity manager. A break at any point stops the chain. But when a full cycle is completed successfully, the next one begins from a higher base. For Affirma, long regarded as a dark-horse private equity firm in Asia, 2026 has been a year in which that upward curve grew noticeably steeper.

Affirma Capital's most prominent achievement this year has been a series of exits. By divesting across consumer goods, manufacturing, the popular cosmetics industry and online platforms, the firm demonstrated a well-rounded portfolio management capability that does not depend on any single sector's boom. It sold five portfolio companies in total, recovering about 640 billion won ($471 million).

The first exit came from Sungkyung Food, the maker of the well-known "Jidopyo Sungkyung" seaweed products. Affirma signed a share purchase agreement with Samchully Group in December last year and closed the deal this year. The firm had early on identified the potential of seaweed — sometimes called the "black semiconductor" for its growing importance as a key export commodity — and transformed a domestic food company into a global exporter.

Manufacturing assets acquired from Seah Group in 2022 also found new owners in succession. Seah ESAB, which produces welding materials for shipbuilding and heavy industry, was sold to Changgwang Industrial in January. Seah FSI and S&G Holdings, which make metal piping for automobiles and home appliances, are set to be acquired by Finger, an affiliate of Sungho Electronics, around October.

The highlight of the exit run was the sale of cosmetics ODM and OEM companies Hwaseong Cosmetic and Nowcos. Affirma had acquired color cosmetics specialist Hwaseong Cosmetic in 2019 and skincare specialist Nowcos in 2022. After selecting Macquarie PE as the preferred bidder in August, the firm signed a share purchase agreement within a month. The auction drew five to six bidders at the preliminary stage, reflecting strong interest.

Affirma invested in both Hwaseong Cosmetic and APR through its Assenta Fund IV. The firm spotted the wave of K-beauty enthusiasm that began spreading from China in the mid-2010s into manufacturing infrastructure, while also recognizing the growth potential of emerging beauty brands. Backing both the brands and the production infrastructure behind them proved to be a perceptive strategy that paid off on multiple fronts.

The exit from TBO, an India-based B2B travel platform in which Affirma invested in 2018, is also nearing completion. After selling a portion of its stake in 2023 and listing TBO on Indian stock exchanges in 2024, the firm has been consistently trimming its remaining position to wrap up a long-running divestment process.

Affirma has also been active on the investment side, moving beyond the conventional buyout framework to pursue opportunities flexibly across special situations and growth capital.

The most notable new investment is in Blue Elephant, a domestic eyewear brand. Affirma committed an initial 75 billion won, with the option to invest an additional 25 billion won depending on earnings performance and other factors. Its maximum stake could rise to 25 percent.

What caught Affirma's attention was a sweeping shift in the eyewear market. The firm believes the logic of fast fashion is seeping into eyewear, which has evolved from a functional consumer product into a fashion accessory. Fast fashion refers to an industry model in which the latest trends are rapidly reflected in products manufactured in large volumes at short intervals and sold at low prices.

Just as people change outfits to match their mood, consumers are increasingly treating glasses and sunglasses as interchangeable items to be swapped among multiple designs. Affirma sees Blue Elephant as having secured a leading position in the emerging fast eyewear market.

Demand from foreign buyers has already been confirmed ahead of any formal overseas expansion. A significant share of Blue Elephant's sales comes from foreign tourists visiting South Korea. Unlike most consumer goods companies, which are feeling the drag of a shrinking population and sluggish domestic consumption, Blue Elephant is benefiting simultaneously from the spread of Korean culture and a rise in inbound tourism.

The investment in SmartScore, a golf IT platform company, has a different character. Affirma acquired approximately 110 billion won worth of SmartScore convertible bonds this year. SmartScore has been under growing financial strain from debt taken on during its acquisition of Majesty Golf in 2022, compounded by a slowdown in the golf industry's growth.

Affirma does not limit itself to high-growth companies. It also extends a hand to firms that have run into financial difficulty during expansion. The firm positions itself as a companion through both a company's growth and its growing pains. For SmartScore, the goal is to reduce the burden of high-interest debt and rebuild a foundation for focusing on its core golf IT platform and golf course operations and management businesses.

The virtuous cycle of investing and exiting has also ignited fundraising. Affirma has formally launched the formation of Assenta Fund VII, its next blind fund. The target size is set at 500 billion won, matching Fund VI, though the market expects the firm could expand that to between 600 billion and 700 billion won, surpassing its predecessor.

Affirma Capital deployed Fund VI, raised in 2024, at a rapid pace. Investments included SK Nexilis' FCCL division (now Flexion), JN Tech, CEK, SmartScore and JTC — a broad range spanning environmental and materials businesses, IT platforms and duty-free operations, laying the groundwork early for raising the next fund.

Its investor base is also broadening. Last month, Affirma was selected as a delegated manager for the climate-response growth support segment of Korea Growth Investment's Growth Ladder Fund 2. With policy capital now added to its existing mix of pension funds, mutual aid associations and financial institutions, the firm's momentum heading into Fund VII formation has strengthened.

Affirma has also put significant effort into building value at existing portfolio companies. Gwangjin Chemical, acquired in 2023, is a prime example. The company processes and recycles waste chemicals generated in semiconductor and display manufacturing. Following a bolt-on acquisition of Leadtech, a specialist in treating process gases used in semiconductor manufacturing, Affirma added MS Dongmin Special Gas, an industrial gas supplier, to the platform.

Rather than acquiring similar waste chemical processors, Affirma expanded Gwangjin Chemical into a new product category. The platform company gains the ability to extend its reach from waste chemical treatment into specialty gases, while the acquired businesses can tap into Gwangjin Chemical's semiconductor client relationships and sales network. The strategy reduces dependence on any single industry or market cycle and improves overall business stability.

CEK, a waste incineration company, is pursuing a strategy of maximizing the efficiency of its existing assets. The company has boosted sales by using the intense heat generated during incineration to produce high-pressure steam. CEK recognized that its incinerators, located inside national industrial complexes in Yeosu, Changwon and Jeonju, sit in areas with strong demand for steam supply. By investing in new pipeline infrastructure and securing additional steam customers, the firm has enhanced the cash-generating power of its incineration facilities.