South Korea’s leading hedge fund Lime Asset Management Co. officially announced restriction to redemption to its fund worth 1.34 trillion won ($1.13 billion) to prevent any principal loss for its investors.

Lime Asset CEO Won Jong-jun said during a press conference on Monday that it could pay back 31.2 percent of mezzanine debts during the fourth quarter this year and 23 percent during the first quarter next year. It expected it could repay 73.5 percent of mezzanine funds by the end of 2020 and first repay 136.3 billion won on Kosdaq venture funds within the next six months. The remaining 26.5 percent will be redeemed after 2021.

It is expected that Lime would fail to make payment obligations on trade financing funds for at least two years and maximum four years as it finds it hard to liquidate the assets mostly invested in North and Latin America. It holds 243.6 billion won in trade financing funds, of which open-end funds accounted for 64.4 billion won and closed-end ones 179.2 billion won.

Won said in confidence that investors would not lose any principal because its alternative investment funds carry very low risk compared to high-risk derivative-linked securities (DLS). He also added it is unlikely to delay repayment on its other funds investing in equities, bonds and properties.

The nation’s top hedge fund has been under a probe by the financial authority as it failed to meet payment dues on some funds due to the liquidity problems. The amount of funds on which the company suspended payment has snowballed because more investors called for redemptions.

By Kim Je-lim and Choi Mira

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