Asset Management Firms Face Profit Challenges in Q1

In a surprising turn of events, domestic asset management companies witnessed a 15% drop in net profits during the first quarter of this year compared to the same period last year, with more than half reporting losses.

Market Expansion vs. Profit Polarization

Despite the quantitative expansion of the asset management market, reaching a total of 1,730.2 trillion won in assets under management, a stark polarization of profits has emerged. This growth, particularly in fund deposits, was fueled by investments in stable options like Money Market Funds and bond-type funds amidst global economic uncertainty.

Rising Number of Loss-Making Companies

The proportion of companies facing losses surged to 54.3%, up from 42.7% the previous year, with private equity management companies being the hardest hit at 60.5%. Financial Supervisory Service officials highlighted the need for structural improvements to enhance financial stability and reduce revenue volatility.