Shinhan Asset to merge with Shinhan Alternative for synergy, diversification

[Photo by Shinhan Asset Management Co.]

South Korea’s Shinhan Asset Management Co. will merge with its sibling Shinhan Alternative Investment Management Inc. in a bid to ramp up efficiency and competitiveness in asset management business through greater synergy between the two units and the enhancement of alternative investment business.

According to investment banking industry sources on Monday, Shinhan Asset Management, formerly Shinhan BNP Paribas Asset Management, and Shinhan Alternative Investment Management will hold separate board meetings on Wednesday to approve a merger between the two companies.

The union is part of a group-wide business realignment plan put forth by Chairman Cho Yong-byoung of Shinhan Financial Group Co. Since taking the helm of the group, Cho has been focusing on diversifying profit sources and creating synergy between investment and asset management units.

Last year, Shinhan Financial Group attempted to transfer the alternative investment assets under Shinhan BNP Paribas Asset Management to Shinhan Alternative, but failed due to opposition from then-major shareholder BNP Paribas Asset Management Holdings.

The group acquired the 35 percent stake in Shinhan BNP Paribas owned by BNP Paribas earlier this year to wholly own the asset management unit, laying the foundation for realigning asset management business.

Post the merger, Shinhan Asset will have 100 percent ownership of Shinhan Alternative. The merged entity, which will have a net alternative asset value of 16.5 trillion won ($14 billion), is scheduled to be launched early next year with a transition period for seamless personnel transfer and system reorganization, a source at Shinhan Financial Group said.

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