DGB Fin to set up asset management firm in Singapore

South Korea’s DGB Financial Group is poised to set up an asset management unit in Singapore, its first overseas fund management arm, according to financial industry sources on Monday.

DGB Group is seeking to win a registered fund management company (RFMG) license from the Monetary Authority of Singapore.

Upon obtaining the license later this year, it will launch asset management services on the island state.

DGB stands for Daegu Bank, headquartered in the city of Daegu, 240 kilometers southeast of Seoul. The financial services group is comprised of 10 subsidiaries, led by Daegu Bank and DGB Life Insurance.

After winning an RFMG license, it plans to apply for RFMG Retail and RFMG Accredited Investors licenses to provide more professional services to both retail and institutional clients.

DGB Financial is stepping up its recruitment for the Singapore unit to be led by the head of the former Midas Asset Management office in Singapore, Choi Youngwook. Midas Asset’s Singapore unit has been shut down due to poor performance.

Choi had previously led the now-defunct Daewoo Securities’ Hong Kong subsidiary, where he managed long/short hedge funds.

With assets of 92 trillion won ($70 billion), DGB Group has built its presence in Southeast Asia. Currently, it operates branches in Shanghai, China and Ho Chi Minh City in Vietnam. It also has set up subsidiaries in Cambodia, Myanmar and Laos.

Still, global businesses account for a negligible 4% of DGB Group’s net profits.

A growing number of South Korean financial services companies have launched Singapore units after exiting Hong Kong.

Such a trend has resulted in Singapore’s regulatory authorities toughening their requirements for new entrants to its asset management market, some industry watchers said.

In 2021, Hana Financial Group and KB Asset Management Co., under KB Financial Group, set up asset management companies in Singapore.

The same year, DGB Asset Management took over BlackRock Inc.'s retail business in South Korea, or retail funds it had sold in the country with a combined net asset value of around 700 billion won, or $620 million at the time.

Write to Byeong-Haw Ryu at hwahwa@hankyung.com
 

Yeonhee Kim edited this article.