[서울신문] New Deal Fund sold out in 5 days… Principal guarantee’good deal’ vs. financial contraction’no deal’

What remains of 130 billion units sold out of’box success’
Charming’principle guarantee, high profits’ in the era of zero interest rates
Financial companies are running out of orders for general investors
Conservation of losses up to 21.5% by investing government finances
“May give false perception by lowering the artificial risk”

The National Participation Policy-type New Deal Fund, which appeared on the 29th of last month, succeeded in a box-office success as the amount of recruitment for general investors worth 130 billion won was sold out five days after its launch. In the era of zero interest rates, there is an analysis that it was attacking the tastes of financial consumers who could not find a suitable investment destination. On the one hand, concerns are raised that the government-led atmosphere of artificial principal guarantees could lead to a contraction in the financial market.

According to the financial sector on the 4th, the New Deal Fund sold by 15 financial companies, including 8 securities companies and 7 banks, was virtually sold out.

On the 29th, the first day of its launch, allotments to Korea Investment & Securities (14 billion won), Yuanta Securities (9 billion won), Hana Financial Investment (9 billion won), and Korea POS Securities (9 billion won) were sold. Subsequently, the sales of the five major commercial banks, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, and KDB Industrial Bank, ended one after another as of the last day. As of this day, IBK Industrial Bank is the only place with allocations left, but it is also observed that if sales resume on the 5th, the limit will be exhausted in the morning. Among the New Deal Funds, which were all made up of 200 billion won, the amount allocated to general investors was about 137 billion won.

The biggest secret behind the success of the National Participation New Deal Fund is that even though it is a high-risk product, the government funds invested in the lower ranks compensate for the loss of ordinary investors who invest in the senior ranks. In fact, it is possible to guarantee the principal. The fund is a’private equity fund indirect public offering’ that mainly invests in shares of listed or unlisted companies related to the New Deal or mezzanine (a financial product that combines the characteristics of bonds and stocks such as convertible bonds and preferred stocks). In addition to the public offering fund for general investors of 137 billion won, government finances of 60 billion won and sub-fund managers at least 3 billion won will be invested.

Among them, at least 21.5% of the government finances 40 billion won (20%) and private equity fund managers 3 billion won (1.5%) will be invested as subordinated investments, and profits up to 20% will be given priority to senior investments. In other words, even if there is a loss, the policy fund, which is a subordinate priority, is designed to share the risk first, so that ordinary investors can receive the principal until the fund base price drops by 21.5%. Also, even if the fund is cut in half, the loss rate is limited to 36.3%.

In the end, it is an analysis that the demand of the market, which wants to be guaranteed principal money but wants more than savings, was hit. An official from a commercial bank said, “In general, high returns and principal guarantees could not be met at the same time, but the New Deal Fund broke this.”

In the financial sector, there are voices of concern over the government-led’low risk, high return’ investment products. An official at a securities company said, “High-risk financial products are basically products that guarantee high returns in exchange for agreeing to the possibility of loss, but it is a mistaken perception for financial consumers to ensure high returns while artificially lowering risks by investing government finances. I can give it to you,” he pointed out.

Reporter Kim Hee-ri [email protected]