FSS Chief: "Role of Institution-Only Private Funds Becoming More Important... Will Maintain Close Communication"

[Asia Economy Reporter Lee Jung-yoon] Lee Bok-hyun, Governor of the Financial Supervisory Service, exchanged opinions on the economic and financial situation with CEOs of eight institution-exclusive private equity fund management companies and communicated on major industry issues.

At a meeting held on the 13th at the Kensington Hotel in Yeouido, Seoul, Governor Lee stated, "Since last year, the business environment for companies has become difficult due to ongoing domestic and international economic and financial uncertainties," adding, "As an expert in corporate management improvement, the role of institution-exclusive private equity funds has become important."

He continued, "Due to the delayed economic recovery, promising companies may face temporary difficulties, or the insolvency of marginal companies may spread. Therefore, based on the accumulated capital strength and know-how in business normalization, I ask that you play a strong supporting role for domestic companies."

Governor Lee also called for the restoration of trust in private equity funds. He said, "Since the reform of the private equity fund system in October 2021 significantly improved the regulatory framework for institution-exclusive private equity funds, I ask you to take great interest in enhancing asset management competitiveness and strengthening internal controls, and to take the lead in restoring trust in private equity funds overall."

Attendees at the meeting included Kang Min-gyun, CEO of JKEL Partners; Kim Soo-min, CEO of Unison Capital Korea; Kim Young-ho, CEO of IMM Private Equity; Park Tae-hyun, CEO of MBK Partners; Lim Yoo-chul, CEO of H&Q Korea Partners; Chae Jin-ho, CEO of Stick Investment; Han Sang-won, CEO of Hahn & Company; and Hyun Seung-yoon, CEO of Stonebridge Capital.

The attendees explained, "The recovery of existing funds is delayed, and due to conservative decision-making by institutional investors, it is difficult to raise new funds," but also stated, "If the demand for corporate restructuring expands in the future due to an increase in marginal companies, various investment opportunities are expected to arise." They also expressed opinions asking the Financial Supervisory Service to help resolve corporate financing difficulties, strengthen risk management of financial companies, and work toward market stabilization.

In response, Governor Lee said, "I will actively support and closely communicate with the industry so that institution-exclusive private equity funds can faithfully fulfill their roles as mentors for corporate management innovation and growth partners."