H&Q Korea's first-gen edge shines: swift exit, fund momentum and a new F&B bet [House Review]

The depth of Korea's first-generation private equity firms proved its worth again this year. H&Q Korea showed the seasoned judgment and rapid execution that set veteran managers apart, turning 2026 into a year of tangible results. The firm exited its Hyundai Elevator investment ahead of expectations, completed a first closing for its fifth blind fund with a broad base of limited partners, and is now eyeing the acquisition of Five Guys Korea as its next growth driver.

H&Q Korea has built a storied track record through landmark deals including Mando, KSNet, JobKorea, HK inno.N and IL Dong Pharmaceutical. When it raised its third blind fund, the National Pension Service designated it an outstanding manager and committed capital without a competitive bidding process. Drawing on that long-established strength, the firm this year delivered across the board — stepping in as a corporate rescuer, executing a clean exit and securing fresh firepower for future investments.

The standout achievement of the year was by far the Hyundai Elevator investment. In May, Hyundai Holdings Company — the holding company of Hyundai Group — terminated its share-pledge agreement and joint-holding agreement with H&Q Korea, closing out a 30-month partnership.

The story began in November 2023, when Hyundai Group Chairwoman Hyun Jeong-eun lost a lawsuit against Swiss elevator maker Schindler Holding and struggled to raise the damages payment. H&Q Korea stepped in as a white knight, injecting approximately 310 billion won ($234 million) into Hyundai Holdings Company. The firm structured the investment across redeemable convertible preferred shares, convertible bonds and exchangeable bonds to spread risk — a detail that drew wide notice in the market.

The exit was executed in carefully staged steps. In October last year, H&Q converted all of its exchangeable bonds into ordinary shares of Hyundai Elevator and sold them through a block deal, recovering approximately 160 billion won. Hyundai Group then settled the remaining balance this year, completing the full exit.

The deal marked the first exit from H&Q Korea's fourth blind fund, coming roughly two years earlier than the market had anticipated — about five years after the fund was established. The founding family retained control of the company, and limited partners booked strong returns. The market has praised the firm for cleanly resolving a high-stakes deal entangled in the governance complexities of a major conglomerate, calling it a win for all parties involved.

Even as a chill settled over the fundraising market, H&Q Korea's standing held firm. Despite a difficult environment for blind fund commitments, the firm established a new vehicle — KH Nuri No. 5 Private Equity — and is pushing to complete the fifth fund by year-end. The target size is 700 billion to 800 billion won.

The fundraise got off to a solid start. The first closing in May brought in 400 billion won and secured a diverse, high-quality lineup of limited partners. The Korean Teachers' Mutual Aid Association committed 100 billion won as anchor LP, joined by the Public Officials Benefit Association, Korea Post, the Korea Scientists and Engineers Mutual-Aid Association and the Military Mutual Aid Association, as well as major private financial institutions including Shinhan, Hana and Woori Bank.

The Hyundai Elevator exit completed this year is also expected to give the fundraise additional momentum. H&Q Korea can now meet prospective limited partners with the fourth fund's successful returns backed by concrete figures.

Whether the National Pension Service resumes its private equity commitments remains a key variable to watch. But having already secured a well-balanced base of institutional investors across multiple sectors, H&Q Korea plans to bring in additional limited partners through year-end and close out the fundraise.

On the new portfolio front, a major food and beverage brand acquisition through subsidiary H&Q Equity Partners is drawing attention. H&Q Equity Partners is pursuing a controlling stake in FG Korea, a subsidiary of Hanwha Galleria and the domestic operator of the global burger franchise Five Guys. It would be the firm's first F&B deal in its history.

H&Q Equity Partners secured preferred bidder status in December last year and renewed its MOU in June, keeping negotiations alive. The firm is now pushing to sign a share purchase agreement by year-end. The valuation being discussed in the market is in the range of 60 billion to 70 billion won.

The two sides are not far apart on valuation, but the cross-border nature of the deal — requiring legal and tax reviews across multiple jurisdictions — has slowed the final coordination. H&Q Equity Partners has appointed Bae, Kim & Lee and Samil PwC as advisers and is proceeding carefully as it works through the remaining details.