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Domestic asset management firms post record-high profits last year

Collected: 2017.03.09

Distributed: 2017.03.13

Source: Go Direct

South Korea’s asset management firms reported 35 percent jump to record-high net profit of 667.4 billion ($578 million) last year, but more than three out of 10 have made losses, according to the Financial Supervisory Service (FSS) Wednesday.

The number of registered asset management firms including private equity funds (PEF) increased by 72 to 165 last year following the easing in licensing regulations. Total assets managed by 165 firms grew 10 percent on year to 907 trillion won by the end of last year. Privately offered funds reached 250 trillion won, exceeding publicly offered funds of 220 trillion won for the first time.

Growth in assets managed by the firms led to increase in fees and commissions revenues. Mirae Asset Global Investment added non-operating profit of 118.2 billion won in its consolidated balance through its stake in Mirae Asset Capital.

Ample liquidity backed by cheap rates turned to private equity funds, contributing to sharp expansion in the private equity and asset management market, said Ryu Kook-hyun, director of asset management office at the FSS said.

Over-competition in the field, however, could hurt profitability and generate money-losing companies, he warned.

Of total 165 management firms, 108 or 65.5 percent kept income in the positive territory, compared with 78.5 percent in the previous year. More than half of 91 PEFs, 48, registered deficit.

By Bae Mi-jung

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