Korea Investment & Securities aims to be Asia's top securities firm

Korea Investment & Securities Co. will step up its asset management business by launching innovative global investment products, aiming to surpass Nomura Securities Co. and become Asia’s No. 1 brokerage company, said its Chief Executive Kim Sung-hwan.

In 2024, the unit of Korea Investment Holdings Co. delivered the strongest profits of domestic securities companies. Along with a balanced business portfolio, the asset management service played a major role in nearly doubling its earnings in 2024 compared to the previous year, 

“We are focusing on providing differentiated global products to individual clients through partnerships with international investment companies,” he told The Korea Economic Daily in an interview on Tuesday. “We aim to increase the share of overseas business from 15% last year to 30% by 2030.”

Overseas business includes providing brokerage and investment banking services to international clients, as well as selling global products to domestic clients.

Retail operations account for 37% of its revenue, while asset management contributes 22%. Overseas business makes up 15%, followed by wholesale business (9%); investment banking (9%); and real estate project financing (9%).

In 2024, its operating profit spiked 93.3% on-year to 1.28 trillion won ($890 million), with net profit up 86.5% to 1.11 trillion won.

ASSET GROWTH

The firm's individual client assets have been growing by 1.2 trillion won ($830 million) a month on average. As of the end of last year, assets under management for its retail clients stood at 67.7 trillion won ($47 billion), up about 27% from a year earlier.

The rapid expansion of wealth management assets is strengthening its position in negotiations with global asset managers for better terms, said the CEO.

"Japanese insurance companies have traditionally dominated the market for high-value financial products, but Korea Investment & Securities will introduce more innovative products at home and abroad," Kim noted.

South Korea’s securities market accounts for only 2% of the global securities service market.

"It is time for a domestic (securities) firm to become a global player,” he said.

In 2023, Korea Investment & Securities signed a strategic partnership with The Carlyle Group to invest a total of $300 million in Carlyle's funds

Under the partnership, it has launched a fund investing in collateralized loan obligations (CLOs), a new type of retail financial product in South Korea. CLOs are structured investment products typically backed by loans to 200-300 companies.

Kim took the helm of the brokerage company in early 2024. After joining the firm in 2004, he led the investment banking division and the retail client division as the youngest executive of the company.

INVESTMENT MANAGEMENT ACCOUNTS

Korea Investment is interested in providing investment management account (IMA) services once the government finalizes the regulatory framework.

The IMA service allows the brokerage company to manage customers' deposited money with the guarantee of the principal repayment. The money can be invested in corporate finance and venture capital, creating a new revenue source for the brokerage firm.

Regarding real estate project financing (PF), which has weighed on domestic securities companies over the past two years, the CEO remains optimistic.

“The real estate market may fluctuate, but it is an essential part of people’s lives,” said Kim, a real estate finance specialist. “While the focus of investment may shift – be it from apartments to logistics centers – the demand for real estate-backed financial products is unlikely to fade.”

Write to Eun-Hyuk Ryu at ehryu@hankyung.com

Yeonhee Kim edited this article.