Mirae Asset Management Launches Private Equity Fund of Funds 'The Selection Fund'

Sales until the 27th

Mirae Asset Global Investments has launched the ‘Mirae Asset The Selection Fund,’ which invests by gathering Korea’s leading private hedge funds.

According to Mirae Asset Global Investments on the 16th, the ‘Mirae Asset The Selection Fund,’ which will be sold from today until the 27th, is a private investment fund-of-funds public offering that seeks stable yet excellent performance. It diversifies investments across four major private hedge fund strategies: concentrated equity investment, equity long-short, event-driven strategy, and multi-strategy.

In particular, to reduce the burden of losses on clients, the fund includes private funds with a ‘profit and loss differential’ structure recently adopted by many private hedge funds. The profit and loss differential method, which differentiates losses and gains depending on the investor, separates securities into senior and subordinated classes, with subordinated investors absorbing losses first up to a certain limit.

This fund invests as a senior investor in 6 to 8 underlying private funds, while the private fund managers participate as subordinated investors by investing 10% of their own capital. These include leading private hedge fund managers in each field such as Tiger Asset Management, known for its concentrated equity investment strategy, as well as GVA, FineValue, NH Hedge, Must, Life, DS, and Align Asset Management. Even if losses occur in the underlying private funds, subordinated investors bear losses up to -10%, while if profits are generated, they are preferentially allocated up to a 21% return. Returns exceeding 21% are distributed more to the subordinated investors.

Another advantage is that individual investors can invest small amounts in excellent domestic private funds. Unlike private funds that require a minimum investment of 300 million KRW, this fund has no such restrictions. It also allows for the construction of a diversified portfolio by investing in strategies such as mezzanine, which are difficult to invest in directly.

Ryu Kyung-sik, Head of WM Pension Marketing Division at Mirae Asset Global Investments, said, “This fund, which allows diversified investment in private funds with the profit and loss differential structure recently spotlighted by the market, will be a meaningful investment solution for asset management.”

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