Korea Herald – The government should allow the establishment of hedge funds in a bid to further develop the local financial industry, think tanks said yesterday.<\/p>\n
The Korea Institute for International Economic Policy and the Korea Institute of Finance separately said state regulators need to lift a ban on the high-risk investment funds, which have been fast growing in the global market in recent years.<\/p>\n
“Hedge funds are rapidly expanding as alternative investments amid low global interest rates,” Yeo Eun-jung, a research fellow with the KIF, told The Korea Herald.<\/p>\n
“I think Korea should gradually open the market to global hedge funds.”<\/p>\n
Hedge funds are private investment funds open to only a limited number of investors, which are not currently subject to any direct regulations – unlike mutual funds, pension funds, and insurance companies.<\/p>\n
Hedge funds tend be considered high risk because they invest in financial derivatives and carry out leveraged trading.<\/p>\n