Hedge fund manager Artman Asset Management is teaming up with Hana Securities to roll out the "KOSDAQ Venture No. 9" fund. Following the launch of the No. 8 fund in Sep., the company is unveiling a new KOSDAQ venture fund for the second straight month, signaling a full-fledged push to expand its retail channel.
According to Artman Asset Management, the fund pursues a balance of stability and profitability based on a combined strategy of listed mezzanine and initial public offerings (IPO).
It minimizes high-risk investments centered on unlisted issues and primarily includes convertible bonds (CB), bonds with warrants (BW), and exchangeable bonds (EB) issued by listed companies. Up to 80% of fund assets go to mezzanine, with 20% allocated to equity-type assets such as public offerings.
As a supplementary strategy, it aims to capture alpha revenue by participating in IPO book-building to leverage the 25% priority allocation benefit for KOSDAQ public offerings.
Artman Asset Management said the KOSDAQ venture fund structure maintains tax benefits while being able to respond to market volatility.
Artman Asset Management puts forward "responsible management" as its core philosophy. Each time a new fund is launched, not only the manager's own capital but also the largest shareholder's and related parties' funds are continuously committed. The co-investment ratio based on assets under management (AUM) is estimated at about 19%.
A company official said, "We are continuing responsible management under the same alignment of interests between clients and the manager."
The performance of the KOSDAQ venture funds already under management also stands out. On a cumulative basis since inception, all funds are generating profits. The simple average annualized return is 16.10%. As of the end of Sep., No. 2 posted a cumulative return of 128.15%, No. 3 82.69%, and No. 4 35.40%.
In the industry, some say the above-market performance and the self-capital commitment structure are likely to instill confidence in retail investors.
The risk management framework focuses on strengthening pre-screening and checking liquidity. For mezzanine investments, it reviews the issuer's credit quality and business structure in advance to minimize the possibility of an event of default (EOD), and manages mainly listed companies with easy exits and secured collateral.
It also signed a memorandum of understanding (MOU) with an external law firm experienced in bad debt recovery to establish a system that can respond quickly in emergencies. It continuously checks the portfolio's liquidity and maturity profile to preemptively manage potential risks.
Its deal-sourcing capability is also seen as a strength. Centered on portfolio managers from equity capital markets (ECM) at securities firms, it has strengthened its network in the mezzanine issuance market and, through collaboration with major securities firms, venture capital, and issuers, is reviewing and executing transactions with various structures.
Meanwhile, the fund will recruit individual investors through Hana Securities' retail channel as well as institutional investors. The inception date is scheduled for Nov. 26, and the fund size is expected to be about 20 billion won.