The North Korean Fund

Thanks, I’ll pass.

London-based Chosun Development & Investment Fund LP is trying to raise US$50 million (euro40 million) to exploit, as it says on its Web site, “opportunities in the Democratic People’s Republic of Korea…one of the last frontiers of global investing.” It claims to be the first such fund dedicated to investing in North Korea.
Nestled in a politically volatile corner of East Asia, North Korea is the world’s lone outpost of totalitarian communism, its dictator Kim Jong Il seen by some as a brutal madman bent on developing nuclear weapons.
Its economy, beset by chronic power shortages and still recovering from a deadly famine in the 1990s, is widely regarded as decades behind the industrialized world. Nearly 20 years ago, North Korea even defaulted on its foreign bank loans.
Such obstacles haven’t deterred Chosun Fund, as it’s known for short. (Chosun is what North Korea calls itself.)

A few years ago, the North Koreans had a bond offering which offered zero interest and–I’m not making this up–an “expression of affection” from the government.
I proposed a counter offer of an “expression of affection,” and I raised them “a laurel and hearty handshake.” I never heard back.
When the bonds come due in ten years, there will be a lottery and the winner will get some interest.
By the way, Kim Il-sung is the official President of North Korea despite dying 12 years ago.

Posted by on June 12th, 2006 at 11:52 am


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