Small and Medium Private Equity Firms Surpass Large Asset Managers in Performance

Brain Unyong Ranks 2nd Overall in Net Profit from January to March
Reflects Stock Market Boom Despite Lime and Optimus Scandals

The stock market of 2020, which experienced the highest rollercoaster ride in history, ended with record highs. The night view of Yeouido's financial district, heralding 2021, is dazzling. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Minji Lee] It has been revealed that the earnings of small and medium-sized private equity asset management firms surged in the first quarter amid a booming stock market.

According to the electronic disclosure system of the Korea Financial Investment Association on the 19th, among about 300 domestic asset management companies, 10 firms posted a net profit of over 10 billion KRW (individual basis) in the first three months of this year. Half of these were small and medium-sized firms with assets under management around 1 trillion KRW. Some also manage public funds, but most generate profits through private equity fund management.

Mirae Asset Global Investments recorded the highest net profit of 198.6 billion KRW. KB Asset Management (18.4 billion KRW) and Samsung Asset Management (18 billion KRW) posted net profits in the 10 billion KRW range, while Shinhan Asset Management and Korea Investment Management earned 11.2 billion KRW and 10.1 billion KRW respectively. These firms are large asset managers handling over 50 trillion KRW in assets.

Small and medium-sized asset managers also posted comparable results. Brain Asset Management, with assets under management below 400 billion KRW, recorded a net profit of 19.6 billion KRW from January to March, surpassing KB and Samsung Asset Management to rank second in quarterly earnings. Brain Asset Management earned 41.3 billion KRW in net profit over the one-year period from April last year to March this year. Compared to a net loss of 120 million KRW from April 2019 to March last year, this marks a performance exceeding that of large asset managers within one year.

DS Asset Management and PIM Asset Management also recorded net profits of 15.9 billion KRW and 13.6 billion KRW, respectively, while Tiger Asset Management (fiscal year ending March) and Anda Asset Management (fiscal year ending March) posted net profits of 11.4 billion KRW and 11.1 billion KRW from January to March. Timefolio Asset Management (fiscal year ending March) earned a net profit of 3.4 billion KRW but achieved 37.2 billion KRW in profits over the past year. The booming stock market and initial public offering (IPO) market after COVID-19 are analyzed to have significantly improved performance. Although the Lime and Optimus fund scandals in 2019 and 2020 raised concerns about the private equity fund industry's contraction, these were largely alleviated by the stock market boom.

Accordingly, the assets under management of these small and medium-sized firms have also grown significantly over the past year. Brain Asset Management's assets surged 60% from 225.7 billion KRW at the end of March last year to 359.7 billion KRW last March. DS Asset Management increased from 1.1036 trillion KRW to 1.2412 trillion KRW during this period, and Tiger Asset Management grew from 394.2 billion KRW to 440.7 billion KRW. Anda Asset Management and Timefolio Asset Management also increased from 889.1 billion KRW and 1.3347 trillion KRW to 1.0594 trillion KRW and 1.4161 trillion KRW, respectively.