Korea relaxes PE rules

South Korea’s financial regulator has made it easier for rich individuals to invest in private equity funds.

South Korea’s Financial Services Commission has lowered the bar for investors to commit capital to domestic private equity funds, according to a local media report.

Under the new rules individual investors’ with more than KRW 500 million ($483,000; €374,000) will be able to commit to private equity funds, down from KRW1 billion.

The bill, which has passed the Korean cabinet, will be submitted to the National Assembly within this month and is expected to be enforced by early next year.

Previously the head of the Korean regulator Shin Je-Yoon said he wanted to promote the asset management sector by revamping private equity regulations.

As well as encouraging individual investors to park cash in the asset class, Je-Yoon has proposed plans to take the mandatory real estate ownership period from the current five years to possibly as short as 12 months.

Korea’s current private equity funds framework was enacted in 2004 as a revision of the Financial Investment Services and Capital Markets Act. Korean funds must be formed as limited partnerships and consists of 49 or less professional investors.

Increasing the checks individuals can write to Korean fund managers comes amid a flat fundraising environment in Asia. Asia Pacific funds raised a total of $20 billion during the first nine months of 2013, equal to the amount raised during the same period in 2012, according to PEI's Research & Analytics division.