Korea Investment Value Asset Management said on the 3rd it will launch a loss-sharing public fund, the "Korea Value Korea Corporate Value Focus Fund." The fund invests in domestic listed shares and exchange-traded funds (ETFs) across seven themes.
Specifically, it is a fund of funds for private equity that diversifies investments in seven underlying private funds at an equal weight (about 14%) within a limit of up to 20% of total asset per fund.
In addition, it uses a loss-sharing structure in which customers invest in the senior tranche and Korea Investment Value Asset Management invests in the subordinated tranche. Accordingly, even if the fund incurs a loss, the subordinated investors bear the loss first up to -15% based on each underlying private fund, and when profits occur, up to 10% profits are allocated equally at the same rate to senior and subordinated at an 85 (senior) to 15 (subordinated) weight. Thereafter, for portions exceeding 10% for both senior and subordinated, profits are allocated at the predetermined ratio of 60 (senior) to 40 (subordinated).
Park Jong-han, a senior manager at Korea Investment Value Asset Management, said, "Because customer losses are covered first, it is a suitable fund for investors seeking stable revenue," adding, "We focused on selecting seven promising industries expected to deliver rapid profit growth and on identifying corporations expected to benefit and see positive changes in line with government policy shifts."
The distributor is Korea Investment & Securities. The subscription period runs from Nov. 3 to Nov. 14. The inception date is Nov. 17. It will be managed for up to three years, and if the customer return reaches 15% (based on Class A; if either the first or second tranche) before maturity, it will be redeemed early.