Marketing Fund Interests: Focus on South Korea
This article describes the applicable exemptions that a fund sponsor of a closed-end private equity real estate fund can expect to rely on in South Korea. The marketing and sale of interests in private investment funds to residents of South Korea are subject to regulation under the Financial Investment Services and Capital Markets Act (FSCMA), which replaced the previous Indirect Investment Asset Management Business Act (IIAMBA) as of 4 February 2009. The Financial Services Commission of South Korea (FSC) and the Financial Supervisory Service (FSS) are responsible for the administration and enforcement, respectively, of the FSCMA and related rules and regulations.
Private equity fund sponsors seeking to raise capital from South Korean investors typically have three options available:
• Structure the offering as an offshore transaction to “Qualified Professional Investors” (no registration is necessary);
• Market onshore, but admit only Qu