More than a dozen investment advisory firms have registered to set up hedge funds since the government eased local capital market regulations to foster the finance industry last year, according to authorities Monday.
Thirteen investment advisers have registered or will register to establish a hedge fund in less than two months since the revision of the Financial Investment Services and Capital Markets Act took effect in November.
With the amended law, the country eased the entry barrier of hedge funds by lowering the minimum equity capital requirement for the applicants from previous 6 billion won ($5.06 million) to 2 billion won.
As of Monday, the country’s financial watchdogs the Financial Supervisory Service and Financial Services Commission have completed evaluations on seven applicants and are expected to give them the green light soon to set up hedge funds.
Of the applicants, five companies are investment advisory companies that seek to transform into hedge fund firms and the remaining two are start-ups, according to the financial authorities.
Six asset managers, including Growth Hill Investment Management, Lime Asset Management and LK Asset Management, completed the registration process on Dec. 17.
Market experts predict that more than 50 companies out of some 170 local investment consulting firms will switch to private equity fund managers with the lowered entry requirements.
