Suspension of Deposits and Withdrawals in European Funds Leads to Redemption Halt in Domestic Public Funds

[Asia Economy Reporter Oh Hyung-gil] As bond funds managed by global asset management firms received redemption suspension recommendations from European financial authorities, the redemption of domestic public funds investing in these funds has been halted.

On the 7th, according to the financial investment industry, Kiwoom Investment Asset Management informed its distributors that it would delay redemptions of the 'Kiwoom Global Alternative Securities Investment Trust (Mixed - Fund of Funds)'.

This fund is a fund of funds that includes the 'H2O Multi Bond' and 'H2O Allegro' funds managed by the European asset management firm 'H2O'.

Earlier, the French Financial Markets Authority (AMF) recommended separating (side-pocketing) the illiquid private bonds held by these funds from other assets for investor protection.

Following the authority's recommendation, H2O management proceeded with asset separation and requested customers to suspend fund inflows and outflows for four weeks starting from the 28th of last month.

Kiwoom Asset Management explained, "Considering the impact on the fund, we decided to delay redemptions as fulfilling customers' redemption requests could harm fairness among investors."

Previously, VI Asset Management (formerly Hi Asset Management) also notified the suspension of redemptions for fund of funds products related to H2O management funds on the 1st. Kiwoom's fund size is approximately 360 billion KRW, and VI Asset Management's fund size is about 100 billion KRW.

This content was produced with the assistance of AI translation services.