IMM Private Equity, a large equity fund in South Korea, will advance into the general private fund market through its private debt firm IMM Credit & Solutions (ICS) to raise funds from a wider range of investors.

According to multiple sources from the investment bank industry on Thursday, ICS is undergoing a registration process with the Financial Supervisory Service to set up a general private equity firm. The overall process is expected to be completed by next month at the earliest.

Market insiders note that the investment firm will be able to expand its investor base through funds joined by individuals. They expect ICS to be able to secure funds from high asset holders and expand investor base to Korea’s retirement pension market worth several hundred trillion won.

Korean financial authority revised a capital market law in October last year to distinguish private funds into two categories - private funds for general investors and private funds for institutional investors such as financial firms.

Under the revised law, up to 100 individuals with certain relevant professional requirements can join a general private fund while management regulations have been reinforced to a similar level as public funds.

The stricter regulatory requirement has forced many PE firms to move to private funds for investors. The recent hikes in interest rates, however, have left financial institutions reducing capital investment, making it more difficult for these firms to raise funds. They are now instead turning to general PEF market.

By Kang Doo-soon, Cho Yun-hee, and Han Yubin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]