It is expected that the size of South Korea-based hedge funds will increase to about seven trillion won (US$6.08 billion) next year based on the National Pension Service’s participation in the market.
According to Shinhan Investment Corporation, the assets under management (AUM) of those four-year-old funds exceeded 4.1048 trillion won (US$3.56 billion) at the end of last month and are forecast to reach 6.8 trillion won (US$5.91billion) in 2017 with the NPS scheduled to take part in the market in the second half of this year.
The size of the market was boosted in October 2015 in particular, when the financial authorities allowed a hedge fund to be operated once an asset management company registers it. In the first quarter of this year, the hedge funds attracted 700 billion won (US$608 million), the number of operators increased from 17 to 26 and the number of such funds jumped from 46 to 78. “The number of these funds is estimated to reach 130 next year and the market will be further enlarged once the sale of funds of hedge funds targeting investors in general is allowed,” said Shinhan Investment Corporation research analyst Sohn Mi-ji.
As of the end of last month, Samsung Asset Management posted a share of 29% in the market with an AUM of 1.1906 trillion won (US$1.03 billion). It was followed by Mirae Asset Global Investments (11%), ANDA Asset Management (9.2%), Brain Asset Management (7.2%) and Quad Asset Management (6.8%).