Asset Management Firms' Q1 Net Profit Up 30% Year-on-Year

Asset Management Firms 42.9% · Private Equity Firms 48.3% in Deficit

Financial Supervisory Service building in Yeouido, Seoul. Photo by Younghan Heo younghan@

Asset management companies' net profit for the first quarter of this year increased by 29.5% compared to the same period last year. This was due to a surge in money market fund (MMF) assets under management, which are considered standby funds, and the growth of exchange-traded funds (ETFs), leading to an increase in public fund assets under management.

The Financial Supervisory Service announced on the 5th that the net profit of asset management companies in the first quarter of this year was 547.3 billion KRW, a 29.5% increase compared to the same period last year. It also rose 54.9% compared to the fourth quarter of last year. Considering the payment of year-end performance fees, the increase in earnings is notable. Operating profit was 499.8 billion KRW, up 21.1% from the first quarter of last year and 50.5% from the previous quarter.

As market uncertainty expanded, standby funds flowed in, causing MMF assets to surge by 23.6% (25.6 trillion KRW) to 134.3 trillion KRW compared to the end of last year. Public fund assets under management increased by 14.0% (45.9 trillion KRW) to 375.1 trillion KRW, resulting in fee income rising by 13.79 billion KRW, or 15.6%, compared to 88.55 billion KRW in the same period last year.

Securities investment gains in the first quarter were 156.7 billion KRW, slightly higher than 153.4 billion KRW in the same period last year. Among companies, 267 out of 468 reported profits, while 201 recorded losses. The proportion of loss-making companies (42.9%) increased by 4.7 percentage points compared to last year. Among general private asset management companies (389 firms), 188 companies, or 48.3%, recorded losses.

The return on equity (ROE) of asset management companies was 14.6%, up 3.5 percentage points from 11.1% in the same period last year. As of the end of March, the assets under management (fund assets under management and discretionary investment contracts) of asset management companies totaled 1,568.3 trillion KRW, an increase of 85.7 trillion KRW (5.8%) compared to the end of last year. Fund assets under management were 976.5 trillion KRW, and discretionary investment contracts were 591.8 trillion KRW, increasing by 5.6% (51.7 trillion KRW) and 6.1% (34 trillion KRW), respectively, compared to the end of last year.

The Financial Supervisory Service stated, "Although the net profit of all asset management companies improved, the proportion of losses slightly increased, mainly among general private asset management companies," adding, "We plan to continuously monitor and inspect weekly to see if any unusual situations arise in the short-term money market due to the surge in MMFs."