Bling meets K-pop: LVMH fund invests in Psy producer YG
By Joyce Lee SEOUL (Reuters) - The private equity arm of French luxury goods giant LVMH will invest up to $80 million in South Korea's YG Entertainment Inc, which manages a stable of K-pop performers including "Gangnam Style" rapper Psy. The investment is one of the biggest bets by a global fund in the "Korean Wave" of culture, including music, movies and TV shows, that has grown in popularity in Asia and globally in recent years. The move could also help accelerate YG's push into fashion. YG and LVMH, the world's largest luxury goods maker, are also in talks for a strategic partnership, said Eai-Jin Song, who heads YG's investor relations team, declining to elaborate. YG has previously said it will launch a joint venture fashion brand with Samsung Group fashion unit Cheil Industries this quarter. YG is also expected to enter the cosmetics business, partnering with China's Huanya Group and local makeup manufacturer Coson Co Ltd, analysts have said. "I expect the investment would enable YG to enter the fashion industry. YG will be able to leverage its performers to expose and market fashion products,” said Hong Jung-pyo, an analyst at Kiwoom Securities. L. Capital Asia will invest 61 billion won ($60 million) in new preferred shares of YG and is in talks to buy another $20 million in shares from Yang Hyun-suk, the former K-pop star who founded YG and is its largest shareholder, according to a YG filing. It will become YG's second-largest shareholder. YG is one of South Korea's three main K-pop talent agencies, with acts including Big Bang and 2NE1 and a market value of $690 million as of Wednesday's closing. "It hasn't been that long that South Korean cultural projects have shown profit, but returns are improving and foreign investors are showing more interest, especially for success cases like YG," James Park, director-general at the Korea Venture Capital Association, said last week. Shares in YG rose 3.1 percent, beating a 0.1 drop in the wider KOSDAQ, ahead of Wednesday's announcement. (1 US dollar = 1,022.6000 Korean won) (Additional reporting by Hyunjoo Jin; Editing by Tony Munroe and Matt Driskill)
