"I Will Defend ECM's No.1 Position Amid Fierce Competition"

Interview with Baek Young-gyu, Head of Investment Banking (IB) Group at Korea Investment & Securities
Expanding Corporate Connections with Differentiated Content
Synergy through Integration of Three Divisions

The war among domestic investment banks (IBs) is intensifying. Ultra-large IBs with over 4 trillion won in equity capital are increasing their capital and continuously expanding their organizations based on high profitability. The funding weapon called issuance of promissory notes has multiplied the ammunition that can be aimed at profitable deals. Small and medium-sized securities firms have also significantly boosted their financial power by increasing profits in project financing (PF) businesses. As market liquidity floods into the investment market, the IB market is expected to enjoy a record boom. We hear from the heads of securities firms' IB divisions about their market outlook and survival strategies.

Baek Young-gyu, Head of Investment Banking (IB) Group at Korea Investment & Securities

[Asia Economy Reporters Jeongsoo Lim, Hyunseok Yoo] Korea Investment & Securities is well known as a securities firm specialized in initial public offerings (IPO). Their system, which acts as a financial advisor to companies even before listing and connects them to IPOs, is unrivaled. The long-term trust-based relationships with companies served as the driving force for becoming the number one securities firm in the domestic equity capital market (ECM) sector, including IPOs, last year.

At the center of Korea Investment & Securities' ECM division growth is IB Group Head (Executive Director) Baek Young-gyu. Since his junior days, he has built a track record in the IPO headquarters of Korea Investment & Securities and was promoted last year to lead three headquarters within the IB Group. Within the IB Group, Headquarters 1 handles IPOs and pre-IPOs (equity investments before listing), Headquarters 2 manages corporate bond issuance and rights offerings, and Headquarters 3 is responsible for mergers and acquisitions (M&A) and acquisition financing.

In particular, Headquarters 1 successfully listed major companies considered big fish last year, such as SK Biopharm, Kakao Games, and Big Hit Entertainment, achieving a performance where both IPO underwriting and acquisition amounts exceeded 1 trillion won, the only securities firm in Korea to do so. Headquarters 2 also significantly contributed to ECM performance by leading rights offerings for Doosan Group affiliates, Korean Air, and Jeju Air.

Executive Director Baek, who oversees the IB Group, aims to maintain the number one position in the ECM sector this year. Specifically, in the IPO sector, he set a market share (MS) target of 20% based on fee income. If the IPO boom continues and the stock market is maintained, achieving the target amount is possible, but the MS goal is a mission to outpace other large securities firms that have also strengthened their IPO divisions.

To maintain the top position, Executive Director Baek integrated the IB organization, which was divided into headquarters last year, into a group and established the 'IB Strategy Consulting Department' directly under the group head. He gathered talented personnel from the Research Center, each IB Group headquarters, law firms, and accounting firms. He said, "We started with the expectation that putting our heads together would create new content rather than being separated by headquarters," adding, "We will evolve from simply playing the role of funding partners to becoming partners in corporate strategy by proactively proposing ideas on M&A and starting from financial planning."

In the debt capital market (DCM), the top priority is to narrow the gap with the leader. Executive Director Baek explained, "As a latecomer in the DCM part, we will secure deals by understanding the company's needs with differentiated content." He is particularly focusing on the ESG (environmental, social, and governance) bond market. ESG refers to sustainable management that places environment, responsibility, and transparent management as core keywords in corporate management. He emphasized, "Companies are actively reviewing ESG-related business and financial activities to communicate with the market," adding, "We have honed our capabilities to lead related deals by proactively researching and accumulating know-how."

In the M&A and acquisition financing sectors, he expects more opportunities overseas. Last year, they successfully completed deals such as Doosan Machine Tools, ADT Caps, and Shinhan Financial Group. Executive Director Baek said, "In M&A, we are approaching by linking with content sales," explaining, "We are expanding deal sourcing channels by holding various seminars and workshops and proposing first to private equity (PE) firms." He added, "The main target for acquisition financing is overseas, and although it is still in the early stages, there are many factors for market growth," stating, "Last year, we reinforced personnel in Hong Kong and New York to enhance overseas deal sourcing capabilities."

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