A Role of Private Equity Markets in Korea: An Overview of Literature on Hedge Funds and Private Equity

Abstract

This paper provides a comprehensive overview and synthesis of extensive domestic and international studies in the private equity market. It delves into encompassing a range of topics including performance, characteristics, risk management, the role within the financial system, and activism, pertaining to hedge funds. Additionally, it explores research focused on performance, GP and LP dynamics, portfolio company, and the legal and macroeconomic ramification, associated with private equity. Regrettably, the majority of the synthesized studies are a global nature, with the Korean literature predominantly centered around VCs due to limitation in data collection. By contrasting international and domestic studies, this paper draws forth significant implications for the Korean private equity market. These implications encompass various aspect, such as revisiting hedge regulations, the reinforcement of hedge fund activism, a reevaluation of the GVC-centered venture capital industry policy, the amplification of VCs’ roles in the IPOs of their portfolio companies, and the exploration of methods to augment value within portfolio companies backed by PE funds.