Lime could halt redemption of W1.33 tril in funds

Lime Asset Management CEO Won Jong-jun bows in apology to investors for suspending redemption of funds, at a press conference the hedge fund manager held at the IFC on Yeouido, Seoul, Monday. / Yonhap

By Kim Bo-eun

Lime Asset Management could suspend the redemption of private equity funds (PEFs) amounting to 1.33 trillion won ($1.12 billion), the head of the hedge fund manager said Monday.

“The redemption of a total 1.33 trillion won in funds could be suspended if liquidity problems are not resolved,” Lime CEO Won Jong-jun said in a press conference held on Yeouido, Seoul.

The press conference was held to offer an explanation after Lime stated in the past weeks it would suspend redemption of a number of funds.

Last week, Lime said it would halt redemption of funds worth 620 billion won invested in private bonds and Mezzanine instruments, a hybrid of debt and equity capital.

While it said the measure was taken to protect investors from losses, suspicions arose over a liquidity shortage.

“Due to the low stock prices on the Kosdaq, the rate of returns on Mezzanine funds has been poor, giving rise to liquidity problems, and the situation became worse as more investors called for fund redemptions,” Won said.

The CEO said the company decided to halt redemptions, to help the stock prices of invested companies recover.

The Financial Supervisory Service last week requested Lime submit documents on the redemption suspensions.

About 3,000 individuals are known to have invested in the funds for which redemptions were halted Oct. 10.

Lime also delayed redemption of three other funds earlier this month, amounting to 27.4 billion won.

Lime currently manages 5 trillion won in equity funds.