Opportunity Opens for Aircraft Engine Fragment Investment... Kyobo Life Designated as Trust Operator

Recently, the number of general investors engaging in fractional investment in music copyrights, artworks, Korean beef, wine, and more with small amounts has been increasing. As early as the first half of this year, the opportunity to invest fractionally in aircraft engines has opened.

On the 21st, Kyobo Life Insurance announced that it has been designated as the trust business operator for the "Aircraft Engine-Based Trust Beneficiary Certificate Trading and Distribution Service," a project approved under the Financial Services Commission's Innovative Financial Services.

Introduced in April 2019, the Financial Services Commission's Innovative Financial Services system grants regulatory exemptions for services that demonstrate greater innovation and differentiation than existing ones, aiming to enhance consumer benefits.

This approved innovative financial project issues trust beneficiary certificates based on aircraft engines and distributes them through a platform. Galaxy Money Tree, an integrated electronic payment (PG) solution company, acts as the project manager and issuer, purchasing and entrusting the physical asset of aircraft engines. Kyobo Life Insurance, as the trust business operator, is responsible for managing the physical asset custody and issuing the beneficiary certificates.

Kyobo Life Insurance receives the physical assets on consignment and issues trust beneficiary certificates through electronic registration. Galaxy Money Tree utilizes blockchain distributed ledger technology to distribute token securities (STO) mirroring the beneficiary certificates on platforms such as Shinhan Investment Corp., thereby attracting investors.

This service combines asset securitization through the issuance of beneficiary certificates of non-monetary property trusts based on aircraft engines and financial innovation through the fusion of leasing service finance and new technologies, expanding investment opportunities in aircraft finance?previously limited to institutional investors?to general investors.

Most domestic low-cost carriers (LCCs) in Korea face financial burdens in purchasing aircraft spare engines and thus use spare engines through operating leases. Since there are no domestic leasing companies, they rely on overseas lessors, which entails cost burdens and issues of national wealth outflow.

The introduction of this service is expected to alleviate airlines' cost burdens, improve operational stability, and provide general investors with new and safe investment opportunities in the aviation industry sector.

A Kyobo Life Insurance official stated, "With the designation as the trust business operator for innovative financial services, we can contribute to the expansion of the domestic asset securitization market through comprehensive property trusts and the activation of fractional investment, an advanced financial technique. Going forward, as a life insurance company, we will continue to focus on customer protection throughout their lives and further strengthen our capabilities as a comprehensive asset management company."