Financial Knowledge

Private Funds & Qualified Investors

This section explains the types of private funds, the requirements for qualified investors, sales procedures and investor safeguards, and the main risks, based on laws and regulations and materials from the financial authorities. Because the private fund regime is amended frequently, please also check the latest laws and regulations and the documents for each individual fund.

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50 questions · Last updated

  1. 01What is a private fund?
  2. 02How do public funds and private funds differ?
  3. 03What does selling 'privately' mean legally?
  4. 04How many investors can a private fund have?
  5. 05How do general private funds and institutional-only private funds differ?
  6. 06What were the key points of the 2021 private fund reform?
  7. 07Who is a qualified investor?
  8. 08What is the minimum amount an individual must invest in a general private fund?
  9. 09Why was the minimum investment for private funds raised to KRW 300 million?
  10. 10Who counts as a professional investor?
  11. 11Can an individual become a professional investor?
  12. 12Where do I apply to be designated an individual professional investor?
  13. 13What requirements must a corporation meet to be designated a professional investor?
  14. 14What changes when you become a professional investor?
  15. 15Can professional investors be protected like general investors?
  16. 16Who can invest in an institutional-only private fund?
  17. 17What are the GP and LP of an institutional-only private fund?
  18. 18Have management-participation private funds (PEFs) disappeared?
  19. 19Can private funds advertise?
  20. 20What is the sales process for a general private fund?
  21. 21Is my investment profile (suitability) checked when I invest in a private fund?
  22. 22What is a key product description?
  23. 23What does the distributor check in the key product description?
  24. 24Does the distributor monitor management after I invest in a private fund?
  25. 25Does the trust company (trustee) of a private fund also monitor management?
  26. 26Do private fund investors receive asset management reports?
  27. 27Are private funds externally audited?
  28. 28What happens if redemption of a private fund is postponed?
  29. 29Can I redeem a private fund at any time?
  30. 30Can a private fund holding many illiquid assets be set up as an open-end fund?
  31. 31Can I ask for a closed-end private fund to be settled before maturity?
  32. 32Can I transfer my private fund interest to someone else?
  33. 33How are private funds managed, and are there investment restrictions?
  34. 34Why does leverage matter in a private fund?
  35. 35Can private funds charge performance fees?
  36. 36What are the risks of investing in private funds?
  37. 37What should I check before investing in a private fund?
  38. 38What requirements must be met to manage a general private fund?
  39. 39Is a new private fund reported to the financial authorities?
  40. 40Can I invest in a private fund with stocks or real estate instead of cash?
  41. 41Can a private fund allocate gains and losses differently among investors?
  42. 42What are blind funds and project funds?
  43. 43Is a hedge fund the same as a private fund?
  44. 44What is the PBS that securities firms provide to private funds?
  45. 45What is a corporate financial stability private fund?
  46. 46What is a start-up and venture private fund?
  47. 47Are private funds for general investors regulated differently from those for professional investors?
  48. 48How do I get information about a private fund?
  49. 49Who can sell private funds?
  50. 50What action is taken if an asset manager manages a private fund improperly?

General financial information, not investment advice. Rules and tax rates change; please check the latest guidance from the source institution.