S.Korea's Kakao Entertainment secures $966 mln investment from sovereign wealth funds

  • Largest overseas investment in Korean content firm, co says
  • Business includes K-Pop, video, online comics and novels
  • 'Recession-proof' nature of business likely a draw -analysts

SEOUL, Jan 12 (Reuters) - Tech conglomerate Kakao Corp (035720.KS) said on Thursday unit Kakao Entertainment secured a 1.2 trillion won ($966.27 million) investment from leading sovereign wealth funds, making it the biggest overseas financing in a South Korean content company.

The move signals investors' bullish outlook for growth potential of Korean content and its "recession-proof" tendencies when weak economic outlook has dried up liquidity in many other sectors, analysts said.

Singapore's GIC and Saudi Arabia's Public Investment Fund (PIF) decided to each invest 600 billion won in the entertainment firm, local newspaper Korea Economic Daily reported on Thursday, citing unnamed investment banking sources.

Kakao, however, did not name the sovereign wealth funds in its statement. PIF declined to comment, while GIC did not immediately comment.

Kakao Corp shares rose 1% in early morning trade, outperforming a 0.2% rise in the wider market (.KS11).

"It's significant that we were able to secure funds of this scale at a time when both the Korean and global markets face a lot of uncertainty and investment sentiment is weak," Kakao Chief Investment Officer Bae Jae-hyun said.

Unlisted Kakao Entertainment has a business portfolio ranging from K-Pop - including artist management - to shows, movies, and online-targeted, comparatively low-cost content such as comics called webtoons and serial web novels.

"Webtoons and web novels are steadily being turned into successful dramas and other formats, so investors think this is good value and timing to invest in an intellectual property holder," said Kim Jin-woo, analyst, Daol Investment & Securities.

"Having secured funds, Kakao Entertainment may seek to strengthen its artist lineup that can better target overseas markets via M&A or other ways."

Saudi Arabia's PIF separately revealed in a Japanese regulatory filing on Thursday that it boosted its stake in Nintendo Co Ltd (7974.T) from 5.01% to 6.07%. read more

The sovereign wealth fund has increased its exposure to the Japanese video gaming industry recently, having taken stakes also in video game companies Nexon (3659.T), Capcom (9697.T), and Koei Tecmo (3635.T).

($1 = 1,241.8900 won)

Reporting by Joyce Lee; Additional reporting by Makiko Yamazaki in Tokyo; Editing by Chris Reese, Sherry Jacob-Phillips and Jane Merriman

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