Millennium Partners, a fund managed by the U.S.-based Millennium Management LLC,
is considering tapping the South Korean hedge fund market, sources said Monday,
in what would mark the first local entry of an overseas fund.
Millennium Partners, which manages funds valued at around US$13 billion,
reportedly plans to set up a local affiliate and seek regulatory approval as
early as this month in a bid to operate its hedge fund here.
"The
regulator has been in talks with the company, although an official document for
approval has not been submitted yet," said an official at the Financial Services
Commission (FSC), declining to elaborate because the details have not been
finalized.
In order to receive a regulatory permit, the affiliate
should have an equity capital of over 6 billion won (US$5 million), a track
record of a hedge fund larger than 1 billion won at its parent company and a
professional workforce consisting of more than three members.
Seoul
has been stepping up efforts to expand the finance industry by introducing hedge
funds and investment banks in hopes they will inject liquidity into the local
market via robust arbitrage trading. Previously, South Koreans were only allowed
to invest in hedge funds overseas.
Last month, the FSC gave the green
light to the establishment of the country's first 12 homegrown hedge funds
operated by nine asset managers, including Mirae Asset Global Investments Co.
and Shinhan BNP Paribas Asset Management Co.
In an earlier interview
with a local media outlet, FSC Chairman Kim Seok-dong reaffirmed his plans to
nurture the local hedge fund market, adding that one foreign company will enter
the local hedge fund market this month.