‘Lime could halt re­demp­tion of W1.33 tril. in funds’

The Korea Times - - FINANCE - By Kim Bo-eun [email protected]­re­atimes.co.kr

Lime As­set Man­age­ment could sus­pend the re­demp­tion of pri­vate eq­uity funds (PEFs) amount­ing to 1.33 tril­lion won ($1.12 bil­lion), the head of the hedge fund man­ager said Mon­day.

“The re­demp­tion of a to­tal 1.33 tril­lion won in funds could be sus­pended if liq­uid­ity prob­lems are not re­solved,” Lime CEO Won Jong-jun said in a press con­fer­ence held on Yeouido, Seoul.

The press con­fer­ence was held to of­fer an ex­pla­na­tion after Lime stated in the past weeks it would sus­pend re­demp­tion of a num­ber of funds.

Last week, Lime said it would halt re­demp­tion of funds worth 620 bil­lion won in­vested in pri­vate bonds and Mez­za­nine in­stru­ments, a hy­brid of debt and eq­uity cap­i­tal.

While it said the mea­sure was taken to pro­tect in­vestors from losses, sus­pi­cions arose over a liq­uid­ity short­age.

“Due to the low stock prices on the Kosdaq, the rate of re­turns on Mez­za­nine funds has been poor, giv­ing rise to liq­uid­ity prob­lems, and the sit­u­a­tion be­came worse as more in­vestors called for fund re­demp­tions,” Lime CEO Won Jong-jun said.

The CEO said the com­pany de­cided to halt re­demp­tions, to help the stock prices of in­vested com­pa­nies re­cover.

The Fi­nan­cial Su­per­vi­sory Ser­vice last week re­quested Lime sub­mit doc­u­ments on the re­demp­tion sus­pen­sions.

About 3,000 in­di­vid­u­als are known to have in­vested in the funds for which re­demp­tions were halted Oct. 10.

Lime also de­layed re­demp­tion of three other funds ear­lier this month, amount­ing to 27.4 bil­lion won.

Lime cur­rently man­ages 5 tril­lion won in eq­uity funds.

Yonhap

Lime As­set Man­age­ment CEO Won Jong-jun bows to apol­o­gize to in­vestors for sus­pend­ing re­demp­tion of funds, at a press con­fer­ence at the IFC on Yeouido, Seoul, Mon­day.

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