Millennium Management LLC, a US major hedge fund, is set to invest about $252 million in South Korean stocks for the first time, local asset management industry sources said on Wednesday, raising hopes for more inflows into the stock market of Asia’s fourth-largest economy.
Millennium, with more than $77 billion in assets under management, plans to entrust 350 billion won ($251.9 million) to Seoul-based Billionfold Asset Management Inc., the sources said. The fund will be managed under a separately managed account (SMA) by the South Korean asset manager.
This marks the first time Millennium has entrusted capital to a domestic asset management firm, specifically for investment in South Korean listed companies. Billionfold was also the country’s first asset management firm, which handles a global hedge fund's money.
Millennium has reportedly been in talks with South Korea’s authorities to ensure that there are no legal issues with the injection of foreign institutional capital into a domestic financial firm, the sources said.
“It is encouraging news for Korean stocks and the asset management industry that Millennium, one of the world’s largest hedge funds, is poised to invest through a local asset manager,” said a financial investment industry source in Seoul.
CONSISTENTLY STABLE RETURNSBillionfold, which manages 250 billion won in assets, is likely to attract more money from Millennium depending on performance, industry sources said.
The South Korean asset manager reported a 1% return last year when the Kospi fell 9.6% and a 5% return in 2022 when the index lost 24.9%.
“Billionfold has delivered an average annual return of 15% over the past five years,” said the financial investment industry source. “Millennium positively evaluated its consistent and stable performance, regardless of market volatility.”
Millennium’s investment plan came as
South Korea’s latest tax overhaul is triggering a wave of criticism from foreign investment banks. Analysts warned that
the proposed tax hikes could dampen investor sentiment just when the country’s equity markets showed signs of recovery.
Seoul shares rallied toward record highs, buoyed by the Lee Jae Myung administration’s vow to invigorate the stock market and global enthusiasm for artificial intelligence and chipmakers.
Foreign investors have bought a combined net 9.8 trillion won in the country’s main stock market
since Lee took office on June 4, raising the benchmark Kospi by 18.5%, according to data from the Korea Exchange.
Write to Minkyoung Shin at
radio@hankyung.com Jongwoo Cheon edited this article.
