There is a belief that Chairman Eun-Soo Eun has revealed since his candidate days. Private equity regulations should be relaxed. The grounds are clear. It is desirable that the liquidity of the market flows to a promising venture company rather than to be focused on real estate that does not create much added value, and private equity can be a means. It is part of so-called productive finance.

However, on the 23rd of last month, Chairman Eun said he would investigate the private equity fund nine months after he took office. This is because Lime Asset Management followed Optimus Asset Management. The amount of repurchase suspensions was KRW 1.6 trillion and KRW 100 billion, respectively. Although it was large, it was more than just an incomplete sales level, and there was a high probability that there was a fraud in the operation process. That's why there aren't any more places like this, and now the financial authorities are saying that they will try to stop by.

I wonder if it is the right solution. Let's revisit the history of the Lime and Optimus crisis. The Lime crisis surfaced when the alleged investment in bad assets was caught by an asset manager, as previously explained. Shinhan Investment Corp, which sold the fund, is also accused of hiding and selling it knowing this. Optimus Asset Management is similar. Explaining to investors that they are investing in stable public institution receivables, the circumstances of investing in risky assets have been discovered. In other words, the managers who made the product deceived the customers, and in severe cases, the vendor conspired.

It is worth noting why managers do this. It's understandable by looking at the history of the Lime Fund's sale fees, where the redemption was suspended. From 2017 to 2019, 20 commissioned companies including Shinhan Investment Corp. and Woori Bank received a lime fund in exchange for a fee of KRW 51.4 billion. Even if the trillion units of money are tied up and lost, managers and sellers will take their share. Conversely, if the rate of return rises significantly, the manager receives additional commitments.

From the manager's point of view, if the so-called'big hit' makes a big profit, there is nothing to lose if it is blown up. Here is the incentive to make risky investments while deceiving investors. It does not take. Private equity funds are not obliged to be disclosed to the outside. Even if your opponent is a financial authority. It is a structure that is difficult to catch. Seller interests depend entirely on sales. There is a great incentive to lead incomplete sales of any product that you want to pack and sell. When things go wrong, I can blame myself for being ``I was also deceived by the manager.'' Looking at the cases so far, it is difficult to say whether it is true or false.

There is no guarantee that another Lime or Optimus will not appear unless you break this incentive structure. In the private equity market, managers have superior information power compared to investors. Investor losses do not lead to manager losses. It is a slanted market.

Today (1st), the Financial Supervisory Service made the first decision to cancel four Lime Trade Finance Fund contracts. It is a decision to cancel the contract and return it in full, literally returning it to its previous state. It is a small but meaningful first step. But last. It's difficult to respond this way whenever things happen. That is why a policy response is required.

However, in the two private equity improvements that have been in place since the end of last year, there seems to be no way to break this incentive. Perhaps there is already a perception that there is a structural problem across private equity in the saying "everyone needs to investigate". The Financial Services Commission and the Financial Supervisory Service are said to announce plans to complete the investigation this week. It seems to be time to come up with a stronger policy response than the investigation. Whether you can faithfully inspect over 10,000 private equity funds with a limited workforce, even if you put off the practical question.