Hanwha Asset Management Co., the brokerage unit of South Korean conglomerate Hanwha Group, will set up a wholly owned private equity investment unit in China, marking the first among the Korean asset managers, in hopes to become an international investment house.

The board of directors of Hanwha Asset Management on Thursday approved the asset manger’s plan of spending $10 billion to establish a wholly owned private equity fund management subsidiary in Tianjin, northeastern China.

The firm plans to file an application with Chinese regulators on setting up a wholly foreign owned enterprise within this month and proceed with registration process as soon as it receives Beijing’s approval. It expects to complete setting up the subsidiary in China around March next year and launch the first investment product in the second half next year.

The Korean investment firm previously mulled establishing a joint venture with a Chinese company due to the Chinese regulations restricting a foreign investor from owning more than 50 percent share. In June, the Beijing government announced a changed foreign investment policy, opening up the local financial market wider for overseas investors. Hanwha Asset Management quickly amended its plan to establish a solely owned investment house in China.

The international brokerage houses including the United Kingdom-based Aberdeen Asset Management, the United States-based Fidelity Investments, and J.P. Morgan Asset Management already obtained licenses to operate a wholly-owned asset management firm in China and are in the process of setting up their local units.

Hanwha Asset Management’s plan of opening a stand-alone investment firm in China is a part of its long-term strategy of upgrading its expertise and work efficiency in asset management to become an international asset manager. The firm has been largely increasing investment in overseas business and alternative investment sector in a bid to secure new growth engine amid the low interest and low growth environment.

Separately, the board directors also approved the firm’s investment plan of taking over Hanwha Life Insurance Co.’s subsidiary in New York, the U.S. at 11.8 billion won ($10.7 million). The investment firm plans to expand alternative investments in overseas market by directly managing the sovereign bonds of advanced economies such as the U.S. through the New York office.

By Song Gwang-sup

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]