Since the inception of the current PEF regime in 2004 following the enactment of the Indirect Investment Asset Management Act, the Korean PEF market has experienced remarkable growth. As of the end of September, there are 268 registered PEFs with the total commitment amount of more than KRW 48 trillion.

Unlike the U.S. and some of the western European countries, Korean PEF regime is unique in that there are different laws that govern different type of PEFs depending on their purposes.

Many of the PEFs in Korea are general purpose PEFs that operate under the Financial Investment Services and Capital Markets Act (“Capital Markets Act”) which governs PEFs that are formed to participate in the management of the target investments, trust and hedge funds. There are corporate restructuring PEFs under the Industrial Development Act, corporate financial stability PEFs under the Capital Markets Act, and the CRVs (corporate restructuring vehicle) under the Corporate Restructuring Investment Companies Act and the overseas natural resources development PEFs under the Overseas Resources Development Business Act.

The lawmakers are moving toward combining the rules and regulations that are scattered around into two categories, "Professional PEFs" (hedge fund) and "Management-Participating PEFs" to relax the restrictions, ease the formation and compliance by the investors to foster growth of investment and M&A.

Our Professionals have been working with a number of private investment companies and partnerships, both small and large. We are constantly monitoring the applicable laws and regulations to provide accurate and the most up to date information for our clients.