Assets of prime brokerage service (PBS) under South Korea’s KB Securities Co. have more than doubled to 1.1 trillion won ($974 million) in just four months since its launch, rapidly expanding its presence in the local PBS market for hedge fund managers.

According to investment bank industry sources on Monday, KB Securities currently manages 1.1 trillion won in assets for its prime brokerage service customers as of April 27. The fund has doubled from 535.9 billion won managed under the former entity KB Investment & Securities in the end of last year, and grew by more than 20 times from 50.3 billion marked in the end of June last year.

KB Securities, formerly KB Investment & Securities, became a large-sized securities company under KB Financial Group after its integration with Hyundai Securities, which the group acquired from Hyundai Group last year, in the beginning of this year. Following the launch, KB Securities has rapidly drawn the country’s major hedge fund operators as its prime brokerage service clients.

A prime brokerage service offers a comprehensive financial services ranging from lending to consulting for managing hedge funds for selected clients. Only a securities firm with equity capital of 3 trillion won or more is permitted to offer PBS products in the country and only six brokerage houses - KB Securities, NH Investment & Securities, Samsung Securities, Mirae Asset Daewoo Securities, Korea Investment & Securities, and Shinhan Financial Investment - currently provide the service in the country.

The local PBS market has burgeoned recently, with assets under management jumping from 6.7 trillion won in the end of last year to 8.5 trillion won as of 21 April. The market is currently led by NH Investment & Securities that manages assets amounting 2.8 trillion won and commands a 33 percent market share followed by Samsung Securities with 23.7 percent and Mirae Asset Daewoo Securities with 17 percent. KB Securities is running tightly behind Korea Investment & Securities that has a 12.5 percent share.

By Chun Gyung-woon

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