Launching Hanwha Asset Management under Kim Jong-ho... "Challenges in ETF and Alternative Investments"

Hanwha Asset Management's Alternative Investment AUM Decreases Compared to Last Year
Expanding ETF Market Share Remains Key

Hanwha Asset Management is welcoming Kim Jong-ho, Chief Operating Officer, as its new CEO. As Kim Jong-ho is recognized as an expert in alternative investments, he is expected to expand related business areas. With Hanwha Asset Management's position declining in the Exchange-Traded Fund (ETF) market, the company also faces the challenge of increasing its market share.

Kim Jong-ho, Nominee for CEO of Hanwha Asset Management. Photo by Hanwha

According to the financial investment industry on the 11th, Hanwha Asset Management is scheduled to hold an extraordinary general meeting of shareholders to confirm the appointment of Kim Jong-ho as the new CEO. The current CEO, Kwon Hee-baek, who has been leading Hanwha Asset Management, will take on the role of an advisor to the company.

The industry views this personnel change as a surprise announcement. On the 29th of last month, Hanwha Group announced the appointments of eight CEOs for seven affiliates, including Hanwha Ocean, Hanwha Systems, Hanwha Energy, Hanwha Impact (investment/business), Hanwha Power Systems, Hanwha Momentum, and Hanwha Asset Management. This announcement came one year and six months after CEO Kwon took office in March last year. His term was set to last until the regular shareholders' meeting in March next year.

Kim Jong-ho, the appointee, previously served as Head of the Alternative Investment Division and Head of the Future Strategy Division at Korea Investment Corporation (KIC). He joined Hanwha Asset Management earlier this month as Chief Operating Officer. Based on his diverse investment experience and expertise, he is expected to lead the establishment of specialized firms in private equity (PE) and venture capital.

In particular, he is expected to strengthen the alternative investment sector. KIC is a sovereign wealth fund that invests overseas. Given that Kim served as Head of the Alternative Investment Division at KIC, it is anticipated that he will reinforce related businesses. According to the Korea Financial Investment Association, as of the 6th of this month, Hanwha Asset Management's assets under management (AUM) stood at 104.08 trillion KRW, up from 102.838 trillion KRW at the end of last year, ranking it within the top five in the industry. Among this, the alternative investment sector accounts for 15.8369 trillion KRW, down from 16.0858 trillion KRW at the end of last year. Despite the overall increase in AUM, the alternative investment sector has decreased.

Alongside this, the company is also expected to strengthen its Exchange-Traded Fund (ETF) business. Although Hanwha Asset Management ranks fifth in terms of AUM in the industry, its market share in the ETF sector remains minimal. As of the end of last month, Hanwha Asset Management's ETF net asset share was 2.27%, placing it seventh. This is a drop from fifth place at the end of last year, with the share decreasing by 0.17 percentage points from 2.44%.

In this context, Hanwha Asset Management is expected to bolster its related business as it changes its ETF brand and launches new products. This year, Hanwha Asset Management changed its ETF brand name from Arirang (ARIRANG) to Plus (PLUS).