Providing Comprehensive Corporate Strategy Solutions with the Nation's Strongest Overseas Network

Relay IB Representative Interview
Kang Seongbeom, Vice President of Mirae Asset Securities

The war among domestic investment banks (IBs) is intensifying. Ultra-large IBs with over 4 trillion won in equity capital are increasing their capital and continuously expanding their organizations based on high profitability. The funding weapon called issuance of commercial papers has multiplied their financial power to target profitable deals. Small and medium-sized securities firms have also significantly increased their financial power by boosting profits in project financing (PF) businesses. As market liquidity floods into the investment market, the IB market is expected to enjoy a record boom. We hear from the heads of securities firms' IB divisions about their market outlook and survival strategies.

[Asia Economy Reporters Lim Jeong-su and Park Hyung-soo] Mirae Asset Securities is the largest ultra-large IB in Korea, with equity capital nearing 10 trillion won. Its capital size alone is overwhelmingly larger than that of the second-tier securities firms, making comparison difficult. Passing the approval for issuance of commercial papers scheduled for this year will further widen the gap in capabilities. In addition, it boasts the widest overseas network. It has established 31 overseas subsidiaries and offices in 15 countries, possessing the best deal sourcing and sales power in Korea.

Kang Seong-beom, CEO (Vice President) of Mirae Asset Securities' IB Division 1, who took office last year, expressed confidence in an interview with Asia Economy on the 5th that Mirae Asset's greatest strengths are unmatched capital power and overseas networks. Based on these strengths, he pledged not only to supply funds to companies in need but also to provide comprehensive solutions as a strategic partner to companies. He emphasized, "It is difficult for IBs to be competitive if they only act as intermediaries helping with simple fundraising," adding, "We will provide solutions to solve companies' concerns such as improving corporate governance and business restructuring."

Thanks to this strategy, equipped with personnel and systems, last year they successfully completed deals advising on the split of LG Chem and the split and merger of KCC. They also participated in strategic equity investments in Naver Financial, mergers and acquisitions (M&A) of Asiana Airlines, and acquisition of SK Broadband shares. They handled prominent deals such as HMM container ship vessel financing and acquisition financing for Bodyfriend and Hugel, satisfying corporate clients. Notably, they were recognized for their outstanding overseas network and were the only domestic securities firm appointed to underwrite foreign currency bonds issued by the government (Ministry of Strategy and Finance), which is a notable achievement.

The overseas network also exerts power in the initial public offering (IPO) sector. CEO Kang explained, "When conducting an IPO, the Hong Kong syndication team checks the local market situation and investor reactions in real time," adding, "Due to the impact of COVID-19, other securities firms can only contact overseas investors via phone and email domestically, so there is inevitably a difference in syndication capabilities."

Thanks to this, Mirae Asset Securities has recently achieved remarkable results in the heated IPO market. They handled the listing of Korea's representative unicorn companies such as social commerce TMON, accommodation reservation platform Yanolja, game developer Krafton, and car-sharing company Socar. SK Bioscience, SK IET, and Iljin Composite Materials have also passed through Mirae Asset and are expected to enter the stock market.

CEO Kang particularly emphasized the significance of being selected as the lead manager for Krafton. He said, "Krafton's founder, Chairman Jang Byung-gyu, the management team, and about 20 operational staff evaluated securities firms' presentations (PT) in a blind manner and chose Mirae Asset Securities," adding, "It is highly meaningful as it shows that the lead manager position was won based on actual capability."

CEO Kang also expects visible results not only in the equity capital market (ECM) but also in the debt capital market (DCM) sector. He predicted, "As large corporations consider investing in new growth industries such as electric vehicles and hydrogen energy, demand for funds will increase," and "Considering abundant liquidity and a low-interest rate environment, there will be many deals in the DCM sector."

Furthermore, he said, "M&A, which was suppressed last year due to the inability to conduct due diligence amid COVID-19, will also increase," adding, "As M&A transactions increase, the acquisition finance market will inevitably grow, so we will strive to support companies through customized services." He continued, "Through the newly established Infrastructure Finance Headquarters, we will expand investment and funding support for eco-friendly ESG (environment, social, governance) projects, renewable energy, and data centers."