Pluto·Tetis Expected Recovery Amount 35.41% from Next Month to 2025... Exact Distribution Scale and Schedule Still Undecided
[Asia Economy Reporter Park Jihwan] Investors in Lime Asset Management's Pluto FI D-1 and Thetis 2 funds are expected to recover only about one-third of their invested capital.
According to the financial investment industry on the 14th, Lime Asset Management announced a 'plan to liquidate assets within redemption suspension funds' amounting to a total of 540.7 billion KRW the day before. The plan includes recovering 407.5 billion KRW from Pluto FI D-1 starting May through 2025, to be repaid in 14 installments. Although the total expected recovery amount is 482 billion KRW, after repaying the total return swap (TRS) loan to securities firms, the remaining expected recovery amount is approximately 407.5 billion KRW. Thetis 2 will also repay 133.2 billion KRW in 14 installments using the same method.
Considering that the book value of the two funds as of the end of October last year, when redemptions were suspended, was a total of 1.5268 trillion KRW, including Pluto (1.2337 trillion KRW) and Thetis (293.1 billion KRW), the expected recovery rate stands at only 35.41%. This is also a smaller amount compared to the 771.4 billion KRW total minimum recoverable amount from the accounting audit completed in February, which included Pluto (602.2 billion KRW) and Thetis (169.2 billion KRW). The accounting audit calculated the total expected recovery amount without considering the repayment of TRS loans that Lime must pay to securities firms, unlike the current repayment plan.
Repayments for the Lime funds are expected to begin as early as next month. Lime funds operate by having multiple sub-funds collect money from investors and invest it into a master fund, which manages the assets. In the case of repayments, the process is reversed: the master fund's assets are liquidated into cash and then distributed to the sub-funds according to their investment proportions. Investors will ultimately receive the amount calculated by multiplying their sub-fund investment by the recovery rate.
Lime stated, "The asset liquidation plan does not confirm the actual scale and schedule of distributions to customers; its purpose is to estimate the amount that may be distributed to investors." Lime aims to implement the first repayment next month and plans to conduct repayments more than three times this year. From the second quarter, if more than 30 billion KRW is secured based on Pluto, the distributable amount will be finalized. Distribution will be carried out on a pro-rata basis within seven business days from the notification date.
There are also variables that could reduce additional recovery amounts. In the case of the Thetis fund, there is a buy position in US dollars in the form of swaps, which may cause changes in the base price due to exchange rate fluctuations. For individual investors, the final redemption amount may vary depending on the TRS ratio and leverage ratio of each sub-fund.
A representative from a Lime fund sales company pointed out, "Although the master fund recovery rate and liquidation plan have been announced, these are only estimates. Considering the difficulty in precisely distinguishing how much each sub-fund invested in the master fund, it is still hard to accurately know the redemption amount and schedule that customers will receive."
An official from the financial authorities said, "The fund recovery rate is a market matter between Lime and the sales companies, so it is not an issue for the authorities to intervene. However, we will actively review any issues that may arise in future dispute resolutions."
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