Financial institutions warm to private equity

Author: | Published: 1 Jun 2005

In Korea, the term private equity fund refers to several different types of partnerships, investment funds and other legal entities formed under various laws. Among these, each of the following can be formed as a private equity fund: a Korean venture fund under the Act on Special Measures for the Promotion of Venture Businesses; a venture capital fund under the Support for Small and Medium Enterprise Establishment Act; a new technology finance partnership under the Specialized Credit Financial Business Act; and a securities investment trust and securities investment company under the Indirect Investment Asset Management Business Act (IIAMBA). With the amendment of IIAMBA in September 2004, however, the term private equity fund now, more often than not, specifically refers to a new type of a private equity fund under IIAMBA.

A private equity fund (PEF) is legally a corporate entity, referred to as a hapja hoesa in the Commercial Code. A...