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[목멱칼럼]Don't invest if you're unsure


[이종우 이코노미스트] Bad news overlaps the private equity market. For three months he was noisy about his former secretary of state, but another problem arose. Derivative-linked funds (DLFs) related to sovereign bonds sold by banks suffered massive losses, and leading private equity fund manager Lime Asset Management announced that it would cease its redemption. Repurchase interruption totaled 1.55 trillion 4,000

It is known that a close victim was born.

There are many accusations about why banks sold dangerous goods in relation to DLF. It's possible People have their own financial practices and bank customers are used to receiving long-term interest, so they recognize that DLF is such a product. Even if the bank talks about the risk in advance, the customer reinterprets it as they know it. That means it was not for sale at the bank.

Financial authorities are investigating whether there are incomplete sales in DLF's investment process and the amount of compensation depends on the outcome. Meanwhile, the Financial Oversight Service implicitly considered 70% as the maximum reimbursement threshold that financial companies should request in the course of financial disputes. Investors are also responsible for 30%, but this index is the reference. In the case of general incomplete sales at the branch level, the maximum compensation is difficult to exceed 70%, but in the case of incomplete sales at the branch level, more than 70% may be compensated, but the proportion is not uniform. The rate of return depends on the investor's age, financial experience and understanding of the product.

Lime Asset Management was the beginning of the crisis to prevent repurchase of funds. Private equity managers made profits primarily through private equity, mezzanine investment and export finance. Private securities and debt securities may receive high interest rates due to the investment firm's lack of credibility, but they have the weakness that they cannot be discounted if a problem arises. If repurchases increase without discounting, only the assets with the lowest repayment rate remain, which inevitably disrupts repurchases because there is a problem with the fund's own security. If there is no problem with the issuer until the security expires, funds may be recovered at maturity.

The problem with private equity funds is that the market has suddenly grown in the short term. At the end of October, Korean private equity funds issued totaled 402 trillion won, 1.5 times larger than public funds. That has more than doubled in five years from 173 trillion in 2014. Although the market is slowing down now, private equity markets are likely to continue to grow. Due to low interest rates, money is forced to go to places where there is even more profit.

I would like to avoid real estate related funds between private equity funds. It is a fund created by financial institutions that invest in real estate development projects, and there is a risk of insolvency if the real estate market is bad. This is where savings banks have invested mainly. Securities companies are now slashing their investments and reselling them to general investors.

There are a few things to think about when investing, including private equity funds. First of all, don't invest in places you don't know well. Investing without a clear understanding of the structure makes it difficult to deal with problems. Because you don't know where the problem came from and how big it was. Similarly, do not invest in a complex product. Futures commodities such as DLF are difficult for the general investor to fully understand. This is because the structure is not only complicated but also unknown. Simple commodities, such as corporate bonds, contrast with the ability to see clearly how revenue is generated and how much profit is expected.

The issue of the private bonds we are facing is a kind of growing suffering. As the market matures in the future, products with structurally reduced risks will emerge, but until then individual investors will have to adjust their risks individually.

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