PEF Managers Council Pushes to Become Federation [fn Market Watch]

[Financial News] The PEF Managers Council, a group of domestic private equity fund (PEF) managers, is pushing to become a formal federation. It has also tabled a proposal to extend the terms of its current chair and vice chair until the formal federation is launched. “Korea Private Equity (PE) Federation” (tentative) has also been floated as the new organization’s name. It plans to complete the establishment process with the aim of beginning operations in January next year.
According to investment banking (IB) industry sources on the 28th, the PEF Managers Council held its annual meeting that day and tabled seven agenda items, including the proposed establishment of the Korea PE Federation, asking the 15 member firms on its executive committee, among others, to vote on them. The council currently assigns member firms different voting rights based on the size of their assets under management (AUM).
The meeting is a step to secure member firms’ consent ahead of establishing the federation and to prepare to apply to the Financial Services Commission (FSC) for approval to establish it.
At the meeting that day, members also discussed agenda items on approving the transition to a federation, amending the existing council’s bylaws, extending the chair’s and vice chair’s terms, dissolving the council and appointing a liquidator, and transferring its remaining assets. The council aims to complete preparations by the end of the year and begin federation operations in January next year.
However, depending on the approval process and other steps involving financial authorities, the actual launch could be delayed until the first quarter of next year.
Park Byung-keun, the current council chair, and Vice Chair Hyun Seung-yoon, whose terms end at the end of this month, are expected to extend their terms and lead preparations until the new organization launches.
Once the new federation is launched, it will pursue a plan to nominate a senior figure from the PEF industry as its next chair.
Political circles are discussing legislation to tighten PEF regulations following the Homeplus incident last year. A number of amendments to the Capital Markets Act are currently pending in the National Assembly, including measures to lower limits on PEF leveraged buyouts (LBOs), strengthen internal controls, and establish new eligibility requirements for major shareholders of asset management firms.
With the launch of a formal federation, the council plans to represent the industry’s views and strengthen communication with financial authorities and the National Assembly.
[email protected] Kang Gu-gwi Reporter