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IFC INVESTS US$50 MILLION IN KOREA’S INVESTMENT TRUST MANAGEMENT INDUSTRY



SEOUL, REPUBLIC OF KOREA, January 31, 2001—The International Finance Corporation will invest KRW57 billion (US$50.2 million) in Cheil Jedang Investment Trust and Securities Company (CJITS) to help its restructuring efforts through the recapitalization of its balance sheet and the introduction of a foreign strategic investor, The Prudential Life Insurance Company of America (Prudential).  IFC’s investment consists of up to KRW40 billion ($35.2 million) in the form of preferred stocks and convertible debentures and an option to invest an additional amount of up to KRW17 billion ($15 million) in CJITS.

This transaction is one of the first financial commitments by foreign financial institutions into the Korean investment trust management industry and is part of a post-Asian crisis effort to stimulate foreign investments in Korea’s financial sector, said Mr. Javed Hamid, IFC’s regional director for East Asia and the Pacific who also heads the World Bank’s East Asia private sector development department.  CJITS and Prudential are working together on major strategic initiatives in the area of product development and new approaches to the marketplace, which will contribute to the modernization and development of the industry, he said.


Prudential is looking forward to developing a successful investment trust business with CJITS, said Stephen Pelletier, president of Prudential’s International Capital Group.  Like IFC, Prudential believes the Korean investment trust market holds great potential and that CJITS is in a position to best capitalize on this opportunity, he added.


CJITS, a well-known investment trust distributor and brokerage company in South Korea, is the parent company and majority owner of CJ Investment Trust Management Company (CJITM), the country’s fifth largest investment trust manager with assets under management of approximately KRW10 trillion ($8 billion).  CJITS manages the sale, marketing, and distribution of investment trust products and securities brokerage.  CJITM manages investment securities, which includes fixed income and equity investment trusts and mutual funds.


Prudential, with more than $363 billion in assets under management as of December 31, 1999, is one of the largest life insurance companies in the United States and is among the largest financial


services institutions in the world.  Prudential serves millions of individual and institutional customers worldwide and offers products and services such as life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, real estate brokerage franchising and relocation services.  Prudential is not connected with the UK-based Prudential PLC.


The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives.  IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.