In the report titled “Gen2 Partners fund freeze headache for Korean brokerages, banks” dated Aug. 11, 2020, we stated that South Korean financial institutions associated with Hong Kong-based hedge fund manager Gen2 Partners are in a predicament as they struggle to ensure the investment -- sold by them -- could be redeemed later, and investors who bought a normal fund, which is KS Korea Credit Fund or CM Credit Fund, are not able to withdraw money on the deadline because of leveraged position of other funds, i.e., KS Asia Absolute Return Fund managed by Gen2 Partners, and that Gen2 Partners used other normally operating funds as collateral.

However, we misidentified the reasons for suspension of Gen2 funds’ redemption. It is not true that KS Korea Credit Fund and CM Credit Fund could not redeem the investment sold by them because of the structure of KS Asia Absolute Return Fund. In fact, the funds managed by Gen2 Partners have been managed independently and each fund has never been used as collateral for each other. And Gen2 Partners informed us that they have decided to suspend the redemption by funds to avoid possible greater losses to the remaining investors after the redemption due to the plunging price of bonds in the worldwide after the COVID-19 event.

The foregoing report is corrected by this report.