South Korea’s private equity and venture capital manager IMM Investment Corp. has decide to invest around 30 billion won ($25.6 million) in K Auction, the nation’s major artwork auction house, betting on the fast growing local artwork auction market.

According to the investment banking industry Sunday, IMM Investment agreed to purchase 30 billion won worth newly issued shares of K Auction late November.

This is considered a pre-IPO placement as the auction house has been mulling an initial public offering (IPO) in the next three to five years.

IMM’s latest investment comes at a time when the Korean artwork auction market is rapidly growing. The market has expanded from a 10.2 billion won in 2004 to almost 200 billion won in 2015 in value.

According to the Ministry of Culture, Sports and Tourism and Korea Arts Management Service, successful bids at seven artwork auction houses in the local market totaled 189.2 billion won last year. Founded in 2005, K Auction is the nation’s top two artwork auction house following Seoul Auction.

K Auction will use the fresh fund in buying outstanding masterworks that would be sold at its offline major auction. Around 90 percent of the auctioneer’s total revenue is generated from offline bids. The fund will also be used to bolster its online auction platform, expand logistics facility for artworks storage, form a network with new collectors and increase the number of professional work force.

K Auction’s largest shareholder is TA Advisor with a 70.8 percent stake. TA Advisor is a holding company made by Park Myung-ja, president of the nation’s leading gallery Gallery Hyundai and her family members including her eldest son Do Hyun-soon. K Auction recorded 5.2 billion won in operating income in 2015, more than doubling from a year ago. Revenue reached 15.3 billion won, up 119 percent on year.

K Auction was the second largest dominant player with a market share of 36 percent, following Seoul Auction who commanded 57 percent of the local artwork auction market last year.

IMM became the first PEF in Korea to invest in an auction house.

By Song Gwang-sup

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]