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South Korea relaxes regulations to encourage home-grown private equity funds08/12/2003. Source: AltAssets. 
 South Korea’s Finance Ministry is to relax regulations in order to encourage home-grown private equity funds to compete with the growing number of foreign rivals that are targeting the country’s distressed financial services sector.
The regulatory changes are designed to help domestic institutions pool their resources in order to set up large-scale private equity funds capable of bidding for major financial services acquisition targets. South Korea does not currently permit domestic private equity funds to take control of financial institutions.
‘For domestic capital to compete with foreign capital in the process of privatisation and restructuring of financial institutions, they need large-size investment funds,’ The Finance Ministry said in a statement.
The announcement follows growing concerns over a string of buy-outs by foreign investments funds of South Korean banks and other financial services companies in the wake of the Asian financial crisis of 1997-1998.
US-based investment fund Loan Star acquired a majority stake in Korea Exchange Bank in a $1.2bn deal in August this year and Prudential Financial acquired two money management divisions of Hyundai Group last month.
Newbridge Capital bought a 51 per cent stake in nationalised Korea First Bank for nearly $500m in 1999. A number of private equity funds are also currently showing interest in troubled LG Card Company, Korea’s biggest card issuer.
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