There are restrictions applicable to PEF's to protect the investor's interest.

For example, a PEF may acquire equity interest through any method allowed under the Financial Investment Services and Capital Markets Act Article 270 Section (1) paragraphs 1 through 3 but under Section (4) of the same article, the PEF must hold the equity interest at least 6 months or longer before it can be sold. PEFs can face severe penalty for non-compliance including criminal charge per Article 466 of the Act. There are similar restrictions for the VC funds as well (Section 15 of the Act on Support for Small and Medium Enterprises Establishment, Section 4-4 of the Act on Special Measures for the Promotion of Venture Businesses, Section 14 of the Act on Formation and Operation of Agricultural, Fisheries, and Food Industry Investment Funds, and the relevant president-ial decrees and ministry decrees).

The restrictions applicable to PEFs and VC funds are scattered around and there are separate regulatory agencies for different types of investment vehicles. This is why a counsel needs a comprehensive knowledge covering all areas.

EHoo can promptly provide appropriate guidelines based on years of experience gained from advising PEFs and VC funds clients.