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NH Investment opens hedge fund subsidiary

Dec 27,2019
NH Investment & Securities formed a new subsidiary to manage hedge funds, a move aimed at cashing in on the growing market for privately-raised investment.

NH Hedge Asset Management opened its doors Thursday after the Financial Services Commission approved its operation last week.

This is the first time that a major brokerage opened a hedge fund unit.

The new subsidiary is the product of the existing hedge fund department at NH Investment & Securities, Korea’s second largest brokerage. The department generated an annual average return of 22.03 percent since 2016.

Lee Dong-hoon, formally the head of the division, will be at the helm of NH Hedge Asset Management.

“We will focus on developing the hedge fund market as an alternative investment for the growing number of institutional investors,” Lee said in a statement.

Born in 1967, Lee graduated from Yonsei University and went on to earn an MBA at the Wharton School of the University of Pennsylvania.

Prior to joining NH, he served as director at Deutsche Asset and BNP Paribas in Hong Kong.

The launch of the hedge fund subsidiary comes with explosive growth in the asset class.

In 2016, hedge fund investment stood at 6.6 trillion won ($5.68 billion), but it doubled to 12.4 trillion won the following year.

The total hit 24 trillion won in 2018, and the figure hit 34.4 trillion won as of November.

Analysts say that the total could have been higher if it were not for major losses at some companies in the business.

Once Korea’s largest hedge fund, Lime Asset Management, came under scrutiny earlier this year after it delayed the repayment of around 850 billion won of investments.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]