[Edaily Marketin JI YEONG-EUI Reporter] Since the inauguration of its new CEO, Hangang Asset Management has been focusing on cost reduction and organizational streamlining. Following its successful return to profitability in the first half of this year, the company has begun the process of liquidating its New York subsidiary. It appears to be implementing structural reforms by closing unprofitable overseas operations while simultaneously replacing personnel in its domestic real estate division.

Successfully Turned a 3.3 Billion Deficit into a Profit in a Short Period… The New CEO’s First Report Card is

... According to the investment banking (IB) industry and a disclosure by Hangang Asset Management on the 22nd, Hangang Asset recorded an operating profit of 1.804 billion won in the first half of this year. This represents an improvement of approximately 5.1 billion won compared to the operating loss of 3.329 billion won posted during the same period last year.

Looking at the disclosed performance by business segment, it appears the company succeeded in turning a profit through a combination of revenue growth and cost reductions. Operating revenue for the first half totaled 6.054 billion won, an increase of approximately 158% compared to the same period last year (2.349 billion won). During the same period, operating expenses fell by approximately 25%, from 5.678 billion won to 4.251 billion won. In particular, commissions paid decreased significantly, from 1.952 billion won to 339 million won. Analysts attribute the turnaround in performance to structural factors—including revenue growth in existing business segments and a substantial reduction in fixed costs such as commissions paid.

Along with the notable improvement in performance during the first half of the year, the company also succeeded in establishing a large-scale real estate development fund. On June 26, Hangang Asset completed the establishment of an investment fund for “ONE X,” a mega-scale office development project in the Subeo District of Euljiro, Seoul. By finalizing the fund for this project—which has a total floor area of approximately 170,000 square meters and is estimated to have an asset value in the 2 trillion won range upon completion—the company alleviated the financial burden of raising funds to repurchase shares from existing investors.

Winding Down

U

.S

. Subsidiary Amid Lackluster Deal Generation… Real Estate Investment Staff Also Overhauled

In its overseas business division,

the company

has begun streamlining inefficient organizational structures. Hangang Asset has decided to liquidate its U.S. subsidiary, which was established as a New York branch in 2016 and converted into a local subsidiary the following year. The inability to secure a clear pipeline of new investment deals in recent years is cited as the reason for the liquidation. Industry observers interpret that the decision stemmed from the subsidiary’s low actual contribution relative to the fixed costs—such as personnel and operating expenses—required to maintain an overseas subsidiary.

Following the closure of the local subsidiary, the firm is expected to rely on the global network of asset managers maintained by its CEO—a former institutional investor (LP) who joined the company last February—to source overseas deals. CEO Kim Su-cheol previously served as head of the Investment and Finance Division at the National Credit Union Federation, where he oversaw alternative investments in domestic and international real estate and infrastructure. This is because LPs with investment scales comparable to that of the National Credit Union Federation are key targets for global asset managers seeking to raise capital, and as such, they have established extensive connections with overseas asset managers. Han River Asset is expected to reorganize its operational structure to identify overseas investment opportunities by leveraging its existing network of asset managers and external experts, rather than maintaining a separate local subsidiary.

Organizational restructuring is also underway within the domestic real estate management division. Han River Asset announced on the 1st of this month that it had dismissed Kim Sang-wook, Head of the Real Estate Division, and Executive Vice President Kim Geun-soo. According to the announcement, the reason for both dismissals was layoff. This move is interpreted as an effort to enhance the real estate division’s investment competitiveness by replacing the existing management team while simultaneously securing new investment professionals.

Previously, in August, the company recruited Executive Director Heo Jun-ho. Executive Director Heo previously worked at the Investment Finance Team at KDB Life Insurance and the Investment Finance Department at Woori General Finance, and later served at JR Investment Management and the Investment Development Division at R-Square. With extensive experience ranging from investment banking in the financial sector to real estate asset management and development, he is currently serving as acting head of the real estate division.

Hangang Asset is also searching for candidates to recruit a permanent head of the real estate division from outside the company. It appears the company will continue its existing management operations under Executive Director Heo while strengthening its investment capabilities by adding new members to the management team.