Mirae Asset Global Investments and KB Securities were selected as outsourced chief investment officers (OCIOs) to manage about 14 trillion won in surplus funds under the housing & urban fund of the Ministry of Land, Infrastructure and Transport. NH Investment & Securities, which had long managed housing & urban fund money, was eliminated despite strong performance, an unexpected outcome.
Inside and outside the industry, some interpret that the "NongHyup reform" plan recently pushed by the ruling party and government may have partly influenced this review. Because NH Investment & Securities is an affiliate of NongHyup Financial, it may have been seen as a burden to entrust the management of large government funds.
According to the financial investment industry on the 8th, the housing & urban fund evaluated management plans and fee structures for three firms—NH Investment & Securities, Mirae Asset Global Investments, and KB Securities—the previous day, and named Mirae Asset Global Investments and KB Securities as preferred negotiation partners. The Ministry of Land, Infrastructure and Transport (MOLIT) plans to notify each firm of the final result soon.
Mirae Asset Global Investments received the highest score, followed by KB Securities and NH Investment & Securities, but the gap among the three was reportedly within about 1 point.
The industry views the elimination of NH Investment & Securities, which delivered stable results, as unusual. NH Investment & Securities and Mirae Asset Securities were selected twice as OCIOs for the housing & urban fund since 2018, and under a structure that allocated mandates differentially by performance, NH Investment & Securities managed more money.
A person familiar with the review said, "There is analysis that the restructuring taking place across the NongHyup organization had a direct or indirect impact on this decision."
Mirae Asset Global Investments and KB Securities will begin work in July and manage housing & urban fund assets for the next four years. The housing & urban fund raises money through housing subscription savings and housing bonds, and as of the end of last year, surplus funds totaled about 14.4 trillion won.