NH Investment & Securities Challenges Entrustment Business for '1000 Trillion Private Equity Fund'

Jung Young-chae, President of NH Investment & Securities

First to Enter the Custody Market in October

"Private Equity Funds Growing 20% Annually"

Expected to Reach 1,000 Trillion KRW in 5 Years

[Asia Economy Reporter Park So-yeon] Jung Young-chae, president of NH Investment & Securities, has thrown down the gauntlet to the fund custody market dominated by banks. Jung stated, "Although there is currently a tendency to avoid fund custody, the private equity fund custody market, growing 20% annually, is a great opportunity that securities firms cannot miss."

Fund custody involves safeguarding and managing assets such as securities and bonds on behalf of other financial companies like asset management firms. The market has been dominated by five major banks including Kookmin, Shinhan, and Hana, but the bank-led fund custody market has slowed following private equity fund incidents. CEO Jung plans to seize the market entry opportunity as a securities firm that relatively well understands complex product structures. In October, NH Investment & Securities will be the first securities firm to enter the custody market, aiming to establish itself as a custody firm specialized in private equity funds.

Jung explained, "Currently, the private equity fund custody market is about 500 trillion KRW and grows 20% annually. In five years, it is expected to grow to 1,000 trillion KRW, and even capturing just 10% of that would mean 100 trillion KRW." He emphasized, "It is a market that will continue to grow. As aging accelerates, investment opportunities broaden, and there is no better investment destination than funds."

The NH Investment & Securities custody department is investing approximately 10 billion KRW to build related systems to provide full-fledged services starting in October. They have also established an operation monitoring system that can verify daily whether fund operations comply with the asset management company's terms. He said, "We can check whether the products we sold are being properly managed, enabling us to provide total services from product sales to custody," adding, "We will take full responsibility for our clients' assets without relying on other custody institutions."

President Jung does not plan to limit custody services to simple asset safekeeping. He stated, "In the past, custody was seen merely as warehouse work, but now custody becomes customer big data," and added, "When IT technologies such as artificial intelligence combine with customer data, greater value can be created."

Meanwhile, regarding the recent difficult market conditions, Jung said, "The stock market is like a rain-fed paddy field, but a farmer who diligently tills the land even during drought will see crops grow when it rains." He added, "Our customers are currently worn out, but we will not turn away and will stand by our customers during these times."