More than 110 billion won out of LIME Asset Management’s 1.6 trillion won PEF investment that has yet to be redeemed has been found to be tied up in real estate project financing in Cambodia.
RAUM Investment, a company closely related to LIME Asset Management, made an investment in a Cambodian resort via its Pluto FI D-1 fund of funds and a project financing loan of US$100 million is yet to be redeemed after its maturity at the end of October last year. The loan was given in 2018 and 2019 at an annual lending rate of approximately 13 percent.
“A due diligence team of Samil PricewaterhouseCoopers visited the site but the development schedule is not fixed at all,” said an industry insider, adding, “RAUM is in negotiations with the guarantee provider to get the money back and it is preparing a legal response such as international arbitration at the same time.”
The Pluto FI D-1 fund is the largest among the three funds of funds that has yet to be redeemed. The size was approximately 970 billion won as of early October last year. The fund was invested in dozens of real estate loans and corporate financing products in and out of South Korea. The loan in Cambodia accounts for more than 10 percent of the total fund assets. The team is currently looking into all the investment assets and its opinion will be delivered to LIME early next month.
In the fund, about 75 billion won was invested in developer Metropolitan and more than 200 billion won went to mezzanine funds of other asset management firms such as Fort Korea, not to mention domestic and foreign real estate mortgage loans and privately placed bonds related to non-large companies. Most of the assets are not mature yet, but the redemption of mature assets is being delayed.
The other two funds are Thetis 2 mezzanine and a trade financing fund. The former is likely to post a loss of 40 percent to 70 percent. A total of 173 funds were invested in the three funds of funds. The 173 funds’ total assets are 1,667.9 billion won.