Exposed to Risks
Nearly half of overseas real estate funds are posting a loss, according to data from the Financial Supervisory Services (FSS).
Out of 401 overseas funds managed by South Korea’s top 15 asset management companies, 191, or 48 percent, of them recorded negative returns, according to the FSS data submitted to Rep. Ji Sang-wook of the Bareun Future Party on Oct. 3.
By asset manager, Hana Alternative Asset Management Co. saw 29 out of its 58 overseas real estate funds record a loss, while Meritz Alternative Investment Management Co. made a negative profit in 19 out of 26 funds. Hyundai Investments Co. also lost money in 10 out of 16 funds. On the other hand, 90 out of a total of 353 domestic real estate funds had a negative rate of return.
Ji said, “The investment in overseas real estate funds is heavily focused on European countries so the domestic market is exposed to the danger of the economic slowdown caused by exchange rate fluctuations and trade tensions. In particular, overseas assets are verified only through written documents. Therefore, the financial regulator needs to come up with an investment guide as well as strengthen actual inspection.”