Mirae Asset, Korea Investment win S.Korea’s 1st IMA licenses

South Korea has approved two of its largest securities houses as the country’s first operators of a new investment-banking product designed to channel more private capital into corporate lending and emerging technologies.

Mirae Asset Securities Co. and Korea Investment & Securities Co. were designated on Wednesday as the first securities firms authorized to offer investment management accounts, or IMAs, eight years after the framework was first created.

Regulators expect each firm to raise more than 35 trillion won ($24 billion) through the new platform, expanding the supply of risk capital available to startups and high-growth sectors.

The designation sits at the top tier of Korea’s comprehensive financial investment business regime, which grants broader investment-banking powers to securities houses with at least 8 trillion won in equity capital.

IMAs allow firms to manage discretionary portfolios while guaranteeing client principal, with at least 70% of assets allocated to corporate-finance and venture-related investments.

The approvals mark one of the most consequential steps in Seoul’s campaign to build homegrown firms capable of competing with US investment banks.

By pairing IMA authority with expanded funding tools, regulators are giving Korea’s largest brokers the balance-sheet scale and flexibility to move deeper into corporate finance, venture lending and cross-border deal-making, bringing the government’s long-standing ambition to cultivate a “Korean Goldman Sachs” closer to reality.

A BANK-LIKE FUNDING TOOL

Combined with the authority to issue short-term unsecured notes, IMAs are expected to allow the country’s largest brokers to raise funds of up to 300% of their equity capital, significantly expanding their lending and investment capacity.

Firms must commit a quarter of these funds to risk capital under government guidelines.

Financial Services Commission Chairman Lee Eog-weon underscored the need for such funding in a recent meeting with industry CEOs, noting that industries such as artificial intelligence and quantum science “require long development cycles and enormous upfront costs,” and that “survival in early-stage technological competition hinges on the availability of risk capital.”

MORE APPROVALS EXPECTED

NH Investment & Securities Co., which recently raised capital to exceed the 8 trillion won threshold, is expected to follow as the next IMA-designated firm.

Regulators say applications are progressing quickly as Seoul seeks to broaden nonbank funding channels for early-stage technology companies.

Separately, the Securities and Futures Commission approved Kiwoom Securities Co. as a 4 trillion won-tier mega investment firm on the same day, clearing it to launch a short-term note business.

Several other securities houses, including Samsung Securities Co., Meritz Securities Co., Shinhan Securities Co. and Hana Securities Co., remain under review.

Short-term notes, which mature within a year and are backed by the firms’ credit, allow brokers to raise up to twice their equity.

The low-cost funding typically flows into corporate loans, investment-grade credit, mezzanine financing and project-finance deals.

Only four firms, such as Mirae Asset, Korea Investment & Securities, NH Investment & Securities and KB Securities Co., currently operate in the market.

If remaining applications are approved, the number of licensed issuers could rise to nine, reshaping competition in Korea’s investment-banking sector.

PROFIT IMPACT AND MARKET SHIFT

Analysts expect IMAs to widen the profitability gap between Korea’s largest securities firms and mid-tier brokers.

Yuanta Securities Co. estimates that Korea Investment & Securities could raise around 10 trillion won through IMAs, generating roughly 100 billion won in additional annual profit under conservative assumptions of a 1-percentage-point margin.

Industry executives say IMA operations demand substantial capital and sophisticated risk-management systems, advantages that favor Korea’s biggest brokers and could accelerate market consolidation.