UBS AG, the world’s largest money manager, said it will pay 180 billion won ($194 million) for 51 percent of Hana Financial Group Inc.’s funds unit to tap South Korea’s $270 billion asset management market.
Hana Financial will sell the stake in Daehan Investment Trust Management Co., South Korea’s second-biggest asset manager, to UBS and retain 49 percent, UBS said in a statement. The nation introduced a corporate pension system in December 2005, helping boost demand for investment funds.
UBS joins Goldman Sachs Group Inc. and JPMorgan Chase & Co. in seeking a presence in South Korea’s asset management market. Fourteen asset-management companies, with 18 percent of the market, were controlled by foreign financial companies as of the end of March.
“Korean players are lagging behind foreign rivals,” said Woo Jae Rong, head of Korea Fund Research in Seoul. “One way they’re seeking to catch up is to find global partners.”
Demand for fund products is growing fast, propelled by the introduction of the pension system and a sluggish property market, Woo said.
“We estimate individuals’ investments in financial assets may rise 10 percent a year in a next decade, and investments in fund products will grow faster than that, at an estimated 15 percent a year,” he said.
This month, JPMorgan and Goldman Sachs announced plans to move into South Korea’s asset management market. JPMorgan got a license to set up an asset management company in South Korea. Goldman Sachs agreed to buy 100 percent of Macquarie-IMM Investment Management Co., a Seoul-based asset management company controlled by Australia’s Macquarie Bank Ltd., for an undisclosed price.