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.