[2025 Asia Fund Awards] FSC: "Qualitative Growth Needed... Support for New Public Offering Funds and ETF Launches"

Congratulatory Remarks by Ham Yongil, Deputy Governor of the Financial Supervisory Service

Yonhap News

Congratulations on the hosting of the ‘16th Asia Fund Awards’ ceremony, and sincere thanks to Woo Byung-hyun, CEO of Asia Economy, and all related parties for organizing this meaningful event. I also extend my congratulations to the executives and employees of the financial companies honored with awards today.

The year 2024 has been a challenging one, marked by increased volatility in the real economy and financial markets due to domestic and international uncertainties. Despite these conditions, I pay tribute to your dedicated efforts for the sound development of the fund industry.

Looking back on last year, structural changes across industries occurred, including the beginning of the artificial intelligence (AI) revolution led by the ‘Magnificent 7 (M7)’ in the United States. Meanwhile, the domestic capital market remained undervalued contrary to investors’ expectations for capital market value-up, resulting in a notable decrease in domestic equity funds and an increase in overseas investment exchange-traded funds (ETFs) in the asset management market.

This year, the global economy continues to face concerns such as the Trump administration’s strengthened America-first trade policies and consequent inflation expansion, as well as economic sluggishness in major countries including the Eurozone. Domestically, the economic environment surrounding the asset management industry is expected to remain difficult due to export sluggishness caused by the global tariff war, deteriorating consumer sentiment from political turmoil, and delayed domestic demand recovery amid ongoing construction market contraction.

Despite these challenges, the asset management industry surpassed KRW 1,000 trillion in assets under management for the first time last year. Over the past decade, asset management companies have achieved remarkable growth with an average annual asset growth rate of 10.7% and a stable return on equity (ROE) of 14.0%, resulting in a 4.6-fold increase in the number of companies and a 1.7-fold increase in employees.

However, despite these achievements, the quantitative growth has been somewhat concentrated in specific sectors such as private equity funds and ETFs. For the asset management industry to fulfill its role as a trustee of national wealth and a driving force for capital market growth, qualitative growth with substance is necessary, including creative product development and fostering the public fund market. To this end, our asset management industry and regulatory authorities must work together going forward.

The Financial Supervisory Service will actively support the asset management industry to establish itself as a catalyst for the capital market and a key pillar of the national economy, growing together based on public trust. First, we will enhance the review process to facilitate the launch of new types of public funds and ETFs, expanding consumer choice while ensuring protection for prudent investors.

Additionally, we will continuously review and improve related systems to enable asset management companies, as major institutional investors, to fulfill their responsibilities as ‘faithful trustees’ through active exercise of voting rights. Furthermore, to enhance the credibility of the asset management industry, we will faithfully implement the governance structure for large asset management companies scheduled to take effect in July this year, strengthening internal control capabilities effectively. We will also strive to establish a systematic foundation for orderly normalization of unqualified private fund managers.

The legendary American investor Warren Buffett once said, “Someone is sitting in the shade today because someone planted a tree a long time ago.” This means that small efforts today can bring about significant changes in the future. I believe that if our asset management industry continues steady efforts, even if seemingly minor, it will soon become a mainstay of our country’s economy. Once again, I sincerely congratulate all the awardees today and wish for the continued development of the ‘Asia Fund Awards.’ Thank you.