KB Asset Management to Manage Prudential Life's 18 Trillion KRW Insurance Assets

KB Asset Management Signs First Discretionary Contract with Prudential Life
Transfer of KRW 18 Trillion Assets, Professional and Efficient Management
Industry Second Place Possible with Unified Insurance Asset Management

[Asia Economy Reporter Junho Hwang] KB Asset Management is emerging as the core of insurance asset management within the KB Financial Group. Starting this month, it will also manage the insurance assets of Prudential Life, increasing its status within the group. With the expansion of assets under management, it is now poised to challenge the second position in the asset management industry.

According to the financial investment industry on the 3rd, KB Asset Management signed a discretionary investment contract with Prudential Life on the 1st. This is the first discretionary contract signed since KB Financial Group acquired Prudential Life as a subsidiary in August last year. KB Asset Management has been managing some of the insurance assets of KB Insurance and KB Life Insurance.

Through this contract, KB Asset Management will manage funds exceeding 18.6 trillion KRW. Including these funds, as of the 1st, the total net assets under discretionary investment amount to 73.2988 trillion KRW, narrowing the gap to Hanwha Asset Management (2nd place), which manages Hanwha Life’s assets, to 756 billion KRW.

The total assets under management (AUM), including general funds, have increased to 127.9386 trillion KRW, surpassing Hanwha Asset Management to rank 3rd. The difference with 4th place Hanwha Asset Management is about 16.5831 trillion KRW, and since KB Asset Management’s fund assets are more than twice those of Hanwha Asset Management, it is expected to be difficult to overturn this ranking in the near future.

KB Group has unified its previously dual insurance asset management system under KB Asset Management to operate more professionally and efficiently, opening the possibility for additional discretionary contracts. At some point, KB Asset Management is expected to threaten the position of Mirae Asset Global Investments, currently the industry’s 2nd place with 165.2826 trillion KRW.

KB Asset Management has been preparing for professional discretionary management since early last year. It expanded its existing Liability-Driven Investment (LDI) organization into the LDI Headquarters and LDI Strategy Office, and established an Alternative Investment Office under the headquarters. Currently, it has separate teams for stocks, bonds, real estate, infrastructure, and alternative investments.

An industry insider analyzed, "This is a case showing that even without being a subsidiary of an insurance company like Samsung Asset Management or Hanwha Asset Management, it is possible to professionally manage insurance assets," adding, "As KB Asset Management’s assets under management grow, competition among the top industry players is expected to intensify."