PEF Council Details Association Transition... Full-Time Executives to Be Hired Externally

Executive Committee Favors “Full-Time External, Part-Time Industry” Principle
Weighing Between Dual Leadership and Chair-Vice Chair Structures
Considering Establishment of a Secretariat

The private equity fund (PEF) managers' council is in the process of transitioning into an association, and is currently working out detailed plans, including the organizational structure. However, it is anticipated that the actual transition to an association and the selection of executives will take some time.

According to the investment banking (IB) industry on August 29, representatives from the executive committee of the PEF Council are deliberating between a joint chairperson system and a system with a non-executive chairperson and a full-time vice chairperson. The basic principle is that full-time executives would be external hires, while non-executive executives would come from within the industry. Additionally, the council has reviewed plans to establish a full-time secretariat with approximately five staff members.

The council representatives are reportedly planning to finalize these details by the regular general meeting in October. Originally, the plan was to resolve the transition through an extraordinary general meeting this month and to appoint a new chairperson in October, but the actual transition and the appointment of a chairperson appear to be several months away. A PEF industry official commented, "The recruitment process for external executives has not yet started, so it will take some time before personnel assignments are finalized."

For non-executive positions, first-generation domestic private equity leaders are being discussed. Notable individuals include Injun Song, Vice Chairman of IMM Holdings; Donggeol Kwak, Vice Chairman of Stick Investment; and Yucheol Lim, CEO of H&Q Korea. All three are founders of major private equity firms. Vice Chairman Song is the founder of IMM Private Equity (PE), and Vice Chairman Kwak co-founded Stick Investment with Chairman Yonghwan Do. CEO Lim also founded H&Q Korea and served as the 8th chairperson of the PEF Council for one year from 2024 to last year.

Injun Song, Vice Chairman of IMM Holdings (from the left), Donggeol Kwak, Vice Chairman of Stick Investment, Yucheol Lim, CEO of H&Q Korea. Company websites

The transition to an association is intended to remove negative perceptions toward asset managers following the Homeplus incident and to respond to the trend of strengthening regulations. Byunghun Park, CEO of Daishin PE, who assumed the position of PEF Council Chairperson at the end of last year, set the transition to an association as a key objective and has continued related discussions with the council representatives. Turning into an association means legally shifting the organization from an unincorporated association to an incorporated association. For example, the Korea Venture Capital Association (VC Association) is a corporate association under civil law. Through this change, the association aims to consolidate the views of individual asset managers and serve as a unified channel for discussions on regulatory matters with the National Assembly and financial authorities.

To enable this transition, membership fees for member firms have also been raised. A tiered system has been introduced where companies with larger assets under management (AUM) pay higher fees. Member firms with over 1 trillion won in AUM reportedly contribute a membership fee of 50 million won. The purpose is to cover increased advocacy activities and legal advisory costs for the transition to an association by raising the fees. Furthermore, transitioning to an association is expected to generate annual expenses of around 1 billion won for office rent and employee salaries, making it difficult to operate with current membership fees alone.

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