Korea's private equity funds to form official association, targeting early next year launch

The PEF Managers Council, a consultative body representing domestic private equity fund managers in Korea, will dissolve its existing organization and relaunch as a formal association. The new body is tentatively named the Korea Private Equity (PE) Association and aims to begin operations in January, according to the original report. The reorganization goes beyond a name change, as it involves formally winding down the existing council and reconstituting it as a new association.

According to investment banking industry sources, the council held a general meeting on Wednesday and put seven agenda items to member firms. These covered approval of the transition, amendments to the council's articles of association, extensions of the chairman's and vice chairman's terms, dissolution of the council and appointment of a liquidator, and transfer of remaining assets. Resolution forms were distributed and are being collected, and the measures are expected to pass without significant opposition by the end of the week. The council currently allocates voting rights in proportion to members' assets under management, with an 11-firm executive committee at its center. More than 10 new managers joined this year, bringing membership to roughly 100 firms.

The timing reflects growing momentum in political and financial regulatory circles to tighten oversight of private equity funds, a push partly driven by the Homeplus crisis. Several bills to amend the Capital Markets Act are pending in the National Assembly, including proposals to cap leveraged buyout limits, strengthen internal control obligations, and introduce new eligibility requirements for major shareholders of PE fund managers. The industry aims to consolidate its voice and strengthen its capacity to respond to these developments.

To avoid a leadership vacuum, the terms of Chairman Park Byung-gun and Vice Chairman Hyun Seung-yun, both due to expire at the end of this month, will be extended so they can oversee the establishment process. Once the association is operating, the industry plans to nominate a senior, widely respected figure as its inaugural chair. The goal is to complete preparatory work by year-end, although the launch could shift to the first quarter of next year depending on financial regulators' approval and licensing schedule. After launch, the association intends to expand its communication with regulators and the National Assembly and represent industry positions more systematically.