SEOUL/HONG KONG (Reuters) - Goldman Sachs Group Inc (GS.N) is quitting the South Korean asset management business just five years after entering the highly competitive market, the firm’s Hong Kong-based spokesman said on Tuesday.
South Korea, Asia’s third-biggest asset management market, is dominated by domestic institutions and wafer-thin profit margins have made it difficult for companies with sub-scale operations to make an impact.
Goldman’s decision to wind down its asset management operations comes at a time when ING Groep NV ING.AS is struggling to find a buyer for its Asia investment management unit, which includes South Korean operations.
Goldman’s unit manages about $4 billion in assets and has about 40 staff. While the fate of staff is not clear, the Hong Kong spokesman said Goldman will try to absorb them in other parts of the company.
“Our expectations for the local Korean asset management business have not been met,” Niklas Ekholm, a London-based spokesman for Goldman Sachs Asset Management, said in a separate statement.
Goldman will continue to invest in South Korea through its offshore funds management unit, the Hong Kong spokesman added. Goldman moved into the South Korean market by acquiring a joint venture between Macquarie Group (MQG.AX) and local firm IMM Investment Management.
Reporting by Joyce Lee and Nishant Kumar; Writing by Denny Thomas; Editing by Matt Driskill