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SEOUL, REPUBLIC OF KOREA, March 22, 1999 - The International Finance Corporation signed a share subscription agreement to invest in one of the first mutual fund management companies in the Republic of Korea – SEI-Asset Korea Co., Ltd. (SEI-AK) - established under new legislation (Investment Company Act of Korea, 1998) that creates alternatives to existing investment trust vehicles.
SEI-AK, Korea's first foreign majority-owned investment company, will be a pioneer institution, setting high standards for the mutual fund industry. It will introduce best international practices and promote transparency, particularly in the areas of investor information, research and due diligence procedures, and tracking of mutual funds investment performance. SEI Investments, a U.S.-based global investment services firm, will be the foreign technical partner and will transfer technology to SEI-AK under a three-year agreement.
Following the establishment of the joint venture on March 18, 1999, SEI-AK will launch a one-year closed-end equity mutual fund targeting Korean institutional and individual investors. The fund is expected to close by April 1999 and will invest mainly in listed companies on the Korea Stock Exchange.
The partners in the joint venture are SEI Investments, with majority holding, Tong Yang Securities Co., Ltd., IFC and the SEI-AK management. SEI-AK (previously known as Asset Korea Capital Management Co., Ltd., which was established in 1991) currently manages two Dublin-listed Korean funds catering to foreign institutional and private investors. Separately, the company also manages domestic institutional and private investor accounts. Tong Yang Securities engages in securities brokerage services. SEI Investments Company currently has more than US$170 billion in assets under management and administration.
IFC will invest KRW 770 million ($0.64 million) for a 9.9 percent stake in SEI-AK and up to KRW 9 billion ($7.5 million) in the first equity mutual fund managed by SEI-AK.
Mr. Javed Hamid, IFC's Director for East Asia and the Pacific, said that the project would deepen Korea's financial sector by developing local mutual funds and introducing new technologies and concepts. It will promote efficient allocation of resources and channel domestic savings into companies that enhance shareholder value and foster strong corporate governance.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to government and businesses.