Both public and private equity funds in South Korea saw a rapid outflow of money this month as a series of redemption suspensions scared off investors.

According to the Korea Financial Investment Association (KOFIA) on Monday, money outflow from public and private funds excluding exchange-traded funds (ETFs) amounted to 15.46 trillion won ($12.8 billion) from June 17 when Optimus Asset Management halted redemption of some funds to June 26. Net outflow came to 10.65 trillion won this month, higher than a 9.09 trillion won pullout in the same month a year ago.

The rapid withdrawal was driven by the recent repayment delays of funds that have been deepening investors distrust in fund management. Since Lime Asset Management failed to meet the scheduled redemption of some funds last year, a series of asset managers including Discovery Asset Management, Italy Healthcare Fund, Popfunding Fund and Optimus Asset Management suspended payments.

Meanwhile, those who sold the frozen funds of Optimus Asset Management are scrambling for a solution. NH Investment & Securities established a task force to deal with the problem and Korea Investment & Securities will hold a customer protection committee meeting chaired by its chief executive officer on Friday to discuss how to compensate victims.

By Hong Hye-jin and Choi Mira

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