Why do private KOSDAQ venture funds often restrict redemptions?

First, under Korea Financial Investment Association regulations, a private venture company investment trust must prohibit redemption for at least 1 year and 6 months from its initial establishment to receive the separate IPO allocation.

Second, under the 2021 private fund reform, a private fund in which assets without an exchange market price, excluding those readily convertible to cash, exceed 50% must be set up as a closed-end fund that does not allow redemption at any time. Funds holding hard-to-sell assets such as unlisted venture shares and mezzanine securities may therefore have restricted redemptions, so be sure to check the maturity and redemption terms before investing.