Where Are Optimus Assets Going...Last-Minute Deliberation on Fund Transfer

Financial Supervisory Service Likely to Review Distribution by Sales Company Against NH Securities' Opposition

[Image source=Yonhap News]

[Asia Economy Reporter Park Ji-hwan] Financial authorities are in the final stages of deliberation over the transfer of fund assets of Optimus Asset Management, whose private equity fund redemptions totaling up to 520 billion KRW are feared to be suspended. Initially, they strongly considered transferring all fund assets to an NH Investment & Securities-affiliated asset management company, the largest distributor, but faced opposition from NH, leading them to consider distributing the fund sales among each distributor.

According to financial authorities and the financial investment industry on the 13th, the Financial Supervisory Service (FSS) began serious discussions with NH Investment & Securities on the transfer plan for the Optimus fund from the end of last month. This was right after the FSS officially mentioned the plan to transfer the fund to an "asset management company affiliated with the distributor" in its interim inspection announcement on the Optimus fund on the 23rd of last month. The industry expected the transfer of fund assets to NH Hedge Asset Management, an NH Investment & Securities-affiliated asset management company.

Until now, the FSS has maintained the position that transferring the fund to NH Investment & Securities, the largest distributor, is essential for efficient asset management to protect investors. The FSS judged that the bridge asset management company (bad bank) plan jointly established by about 20 distributors, as in the Lime Asset Management case, was inefficient.

However, it is reported that the transfer process has not progressed rapidly as NH Investment & Securities feels burdened by the idea of taking all the fund assets. There is concern that NH Investment & Securities might end up bearing sole responsibility for the fund fraud incident.

The currently prominent plan is to transfer the fund assets according to the sales proportion of each distributor. An FSS official explained, "Unlike the Lime fund, which had a complex multi-layered product design, the Optimus fund has a relatively simple product structure and clear distinctions between funds by distributor, so we are considering this approach."

A securities company involved in selling the Optimus fund said, "Currently, specific methods for transferring the Optimus fund are being proposed by the FSS, and since there are differences in positions among distributors, we plan to review the relevant plan once the authorities make a decision considering these factors."

As of the 21st of last month, redemptions for 46 funds managed by Optimus, totaling 515.1 billion KRW, have been suspended or are difficult to redeem. Among these, NH Investment & Securities accounts for 432.7 billion KRW, representing 84% of the total. Next are Hi Investment & Securities (32.5 billion KRW), Korea Investment & Securities (28.7 billion KRW), Cape Investment & Securities (14.8 billion KRW), Daishin Securities (4.5 billion KRW), and Hanwha Investment & Securities (1.9 billion KRW), in that order.

The FSS and NH Investment & Securities have currently selected Samil Accounting Corporation as the due diligence firm and are conducting a review with about 20 personnel to determine the scale of bonds recoverable from the Optimus fund. After the due diligence is completed, the fund transfer will proceed following processes such as net asset value adjustment. Once the transfer is completed, procedures such as cancellation of Optimus registration and acceleration of investment recovery are expected to follow.

This content was produced with the assistance of AI translation services.