Often found at theaters and museums, Kwon Mee-yoo has covered a wide range of cultural fields from K-pop and dramas to theater and fine art for over a decade. Now as K-Culture Desk editor, she tries to connect Korean culture with global readers through fresh perspectives.
KDB Daewoo reliable hedge fund broker
By Kwon Mee-yoo
Hedge funds and prime brokerages are inseparable and the success of Korean-style hedge funds depends strongly on reliable prime brokers.
KDB Daewoo Securities is ready to be the best prime brokerage service provider in Korea, based on its abundant experience as an investment bank.
Prime brokerages provide a variety of services on top of hedge funds, from trading stocks and making payments to loan transactions.
KDB Daewoo launched its prime brokerage service (PBS) team in 2009 to prepare for the exclusive service for the long term, compared to other securities companies. There are 18 members in KDB Daewoo's PBS team, the largest in the industry, and they cover client services, trading and execution, granting of credit, risk management and settling accounts, providing a one-stop service.
The securities company increased about 1 trillion won in capital by issuing new stocks last year, making its total equity capital 3.8 trillion won to meet the requirements for prime brokerage services.
To differentiate its quality, KDB Daewoo's PBS employees all have experience in asset management and have closely cooperated with the research department.
"Our PBS team supports and suggests directions from the investment decision-making stage, instead of just carrying out orders from hedge fund managers," a KDB Daewoo Securities spokesman said.
"Prime brokerage services are a competition of scale and infrastructure and the size of the company and available resources matter in the business," the KDB Daewoo spokesman said. "We have the largest equity capital in the industry by last year's paid-in capital increase and such sufficient funds could be a merit in granting credit."
KDB Daewoo was the first to begin a credit granting service in the field. Stability as a member of KDB Financial Group is another of its strengths.
As of February, KDB Daewoo is leading the hedge fund market with investment in domestic hedge funds at 261 billion won, about half the amount invested in Korean-style hedge fund.
The success of PBS relies on the size of hedge funds, as it can employ various strategies and widen the range of services only when hedge funds get bigger. "Playing a leading role in the early stages of prime brokerage services will lead KDB Daewoo to see advantages," the spokesman said.
The Korean hedge fund market began with 150 billion won in investment in 12 hedge funds of nine property management companies in December 2011 and as of last week had 17 products from 12 firms with 500 billion won.
"We expect our PBS sector will develop along with the growth of Korean-style hedge funds."