Korea Investment Management and Korea Investment Value Asset Management, both asset management units of Korea Investment Holdings (071050), will overhaul their business portfolios through a split-merger. Korea Investment Management will focus on passive products including exchange-traded funds, while Korea Investment Value Asset Management will take sole charge of traditional active management, including equity active funds and money market funds.
The two firms each held board meetings on the 27th and approved the split-merger agreement, according to filings with the Financial Supervisory Service's electronic disclosure system, DART. Under the plan, Korea Investment Management will spin off its securities fund and short-term money fund, or MMF, divisions and merge them into Korea Investment Value Asset Management. The two companies plan to hold extraordinary shareholder meetings on September 11 to vote on the split-merger. The merger date is January 1, 2027.
The decision is expected to clarify the division of roles between the two asset managers under Korea Investment Holdings. Korea Investment Management will hand over its existing active fund and MMF operations to the value asset management arm and concentrate its resources on passive ETFs and index funds under the "ACE" brand. Instead of separately spinning off its ETF business division, an option that had been under discussion, the group chose to keep the existing entity as a passive-focused firm and transfer the active business. The aim is to sharpen the passive expertise of the "ACE" ETF brand and unify decision-making to gain an edge in an increasingly fierce competition for market share.
Korea Investment Value Asset Management is expected to sharply expand its assets under management and overall scale by absorbing Korea Investment Management's active funds and its large pool of short-term money in MMFs. Adding Korea Investment Management's active management staff to the value firm's traditional value-investing philosophy and its expertise in analyzing small- and mid-cap stocks is expected to strengthen its capabilities not only in public active funds but also in the active ETF market.
With the move, Korea Investment Holdings completes a lineup of asset management affiliates spanning passive and active strategies, following the 2022 spinoff of Korea Investment Real Asset Management, which handles real assets. "This is a step to clear up overlapping areas among affiliates and give each house a distinct identity, in line with the fast-growing ETF market and changes in the public fund environment," an official in the financial investment industry said. "Based on competitiveness specialized in passive and active areas respectively, they will be able to maximize management efficiency and the speed of product development."
