Korea Financial Group Bets 30 Billion KRW on Lee Chaewon ESG Fund

Three Affiliates Including Korea Investment Real Estate Trust Make Seeding Investment
Discovering Undervalued Companies Strongly Committed to ESG Management Improvement

Lee Chaewon, CEO of Life Asset Management./Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment Financial Group has invested 30 billion KRW in an ESG (Environmental, Social, Governance) fund created by Lee Chae-won, Chairman of Life Asset Management. Lee Chae-won is a first-generation value investor trusted by Chairman Kim Nam-gu and is a former member of Korea Investment Value Asset Management.

According to the Financial Supervisory Service's electronic disclosure and the financial investment industry on the 2nd, three affiliates of Korea Financial Group, including Korea Investment Real Estate Trust with 5 billion KRW and Korea Investment & Securities with about 24 billion KRW, invested a total of 30 billion KRW in the ‘Life Korea Enterprise ESG Improvement Specialized Private Investment Trust No.1’.

‘Life Korea Enterprise ESG Improvement Specialized Private Investment Trust No.1’ is a fund created by Life Asset Management, newly launched last June when Chairman Lee Chae-won returned to the asset management industry. The fund size is 90 billion KRW. One-third of this amount was invested by Korea Financial Group.

It is evaluated that the success of funding by the newly established Life Asset Management was largely due to Lee Chae-won's influence. The close relationship between Kim Nam-gu, Chairman of Korea Financial, and Chairman Lee Chae-won is well known. After leaving Korea Investment Value Asset Management, Lee Chae-won is known to maintain the relationship by greeting Chairman Kim Nam-gu first when returning to the industry.

The fund invests in undervalued companies with insufficient ESG management but strong willingness to improve. Life Asset Management communicates with company owners or management and proposes ESG consulting, aiming to realize profits in 2 to 3 years. This contrasts with existing ESG funds that invest in related industries and companies with high ESG ratings.

In particular, Chairman Lee Chae-won defines Life Asset Management’s investment approach as a ‘friendly activist fund.’ Unlike private equity funds that secretly purchase corporate shares and then demand shareholder proposals, this fund first declares its investment intention and jointly sets ESG management goals.

The focus on value investing in the ESG field is also interpreted as a factor that led to the investment by Korea Investment Financial Group. With the base interest rate hike approaching, undervalued stocks based on performance are gaining attention. As of the end of last year, the fund recorded an ‘outperform’ return of more than 10% compared to the KOSPI.

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