South Korean investment firms’ assets under management topped a milestone of 1,000 trillion won ($897.6 billion) at the end of June as largest-ever liquid capital sought greater returns amid prolonged cheap interest rate environment.
The Financial Supervisory Service said Wednesday that assets under Korean investment companies’ management reached 1,010 trillion won as of the end of June this year after adding 29 trillion won during the second quarter. This is the first time that total AUM of the country’s asset management companies breached the 1,000 trillion mark.
Over the cited period, assets held for investment in funds grew 3.6 percent to 541 trillion won and those under comprehensive investment management service account was up 2.2 percent to 469 trillion won. Of the assets held for fund investment, public equity fund rose 1.7 percent to 232 trillion won and private equity fund gained 5.1 percent to 309 trillion won. Investments in bonds, MMFs, and real estates led the increase in assets in both public and private equity funds.
The combined net profit of the Korean asset managers amounted 216.2 billion won in the second quarter, up 26.7 percent from the previous three-month period. They earned total 272.2 billion won in operating profit after adding 39.1 billion more compared to the previous quarter, thanks to larger service fee revenue. Their non-operating also improved by 29.7 billion.
Commission income rose 8.4 percent to 653.6 billion won over the cited period as investors entrusted more funds for real estate and alternative investments.
But only 137 out of total 228 asset managers operating in Korea were able to make profits while 91 logged losses in the second quarter, bringing up the ratio of money-losing asset managers to 39.9 percent from 36.0 percent in the first quarter. Private equity fund managers, especially, performed poorly with 81 out of all 154 ran into red figures.
The overall return on equity reached 15.0 percent in the second quarter, up 2.9 percentage points from the previous quarter.
As of the end of June, there were 228 asset management firms operating in Korea with five newly opening business after March.
By Jin Young-tae and Cho Jeehyun
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