By Park Hyong-ki
Staff Reporter
A growing number of chaebol are aiming to enter the securities and asset management industries, ahead of the capital market deregulation.
The Financial Services Commission (FSC) said it has given licenses to GS and LS groups to operate asset management businesses after a thorough assessment.
GS adds GS Asset Management to its list of subsidiaries mostly concentrated in the energy, construction and retail sectors.
LS, a cable and metal goods conglomerate, is also gearing up to consolidate E-Trade Securities through a private equity fund whose majority shareholder is LS Networks, a sportswear maker.
Both companies were former affiliates of the LG Group before the electronics chaebol transferred to a holding company system.
Except for LG, Kumho Asiana and Hanjin, the remaining seven of the top 10 conglomerates have or are planning to secure investment operations as new growth engines.
Even Lotte, a group with interest in confectionary and retail shopping, has begun an asset management business following the takeover of Cosmo Investment Management last month.
The group said the company is planning to provide pension products or develop financial goods with its affiliate Lotte Card. Its next target is setting up a securities unit.
Analysts say conglomerates' interest in investment business is growing as they see growth potential, and can utilize such affiliates for capital raising and mergers and acquisitions.
Hyundai Group headed by Hyun Jeong-eun is moving to jump into asset management through Hyundai Securities, one of the top five brokerages.
Of chaebol that recently extended into securities or investment management, Hyundai-Kia Automotive, the No.1 carmaker, took over Shinheung Securities and established HMC Investment Securities; while Hyundai Heavy, the No.1 shipbuilder, acquired CJ Investment & Securities. Both were former affiliates of Hyundai Group.
Doosan Group also gained regulatory approval over its acquisition of BNG Securities, a small-tier brokerage, despite legal issues.
Current rules bar a company with a record of financial law violations in the past five years from taking over a securities firm. Doosan's key shareholders were convicted of accounting fraud, but were pardoned with their civil rights restored.
phk@koreatimes.co.kr