Korea Investment & Securities Enters Direct Operation of Private Equity Funds

Korea Investment & Securities is starting a private fund management business for the general public to diversify its revenue streams.

According to the financial investment industry on the 4th, Korea Investment & Securities completed the registration for general private collective investment business approval with the Financial Services Commission on the 28th of last month.

Among domestic securities firms, seven small and medium-sized securities companies including Shinhan Investment Corp., Kyobo, DS, Leading, Shinyoung, IBK Investment, Cape Investment, and Korea Asset Investment Securities are registered as firms capable of managing private funds. Among the top five domestic securities firms by capital, NH Investment & Securities entered the private fund management market in 2017 but separated the related business division into NH Hedge Asset Management in 2019.

Private funds limit the number of investors to fewer than 50. High-net-worth individuals who prefer not to disclose their investments publicly mainly invest in private funds. They seek profits using various management strategies such as initial public offerings (IPO) and mezzanine investments.

Korea Investment & Securities expects that by managing the funds directly, they will be able to smoothly and transparently handle the management instruction process. Large securities firms with more abundant capital than general asset management companies can offer differentiated fund products such as profit-differentiated funds that prioritize profit and loss by investor.

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