South Korea Asset Management Market Overview, 2029

The South Korean asset management market has experienced significant growth in recent decades. In the early 2000s, the market was dominated by traditional products like bank deposits and insurance-based savings. However, the liberalization of the financial sector and the introduction of new investment products, such as mutual funds and exchange-traded funds (ETFs), fueled market expansion. The market witnessed steady growth in the mid-2010s, reaching nearly $800 billion in total assets by 2017. Korean asset management culture is characterized by a strong preference for domestic investments, with a majority of assets concentrated in local equities and bonds. However, there's a growing interest in diversifying into foreign markets, particularly thematic investments and alternative assets like private equity and real estate. This trend is driven by investors seeking higher returns and hedging against domestic market volatility. Additionally, the rise of target-date funds, catering to retirement needs, is gaining traction, presenting opportunities for both domestic and foreign asset managers.

According to the research report "South Korea Asset Management Market Overview, 2029," published by Bonafide Research, the South Korea Asset Management market is expected to reach market size of more than USD 26 Billion by 2029. Several factors are driving the growth of the South Korean asset management market. The aging population and increasing disposable income are leading to a rise in individual wealth, creating a larger pool of potential investors. Furthermore, growing financial literacy and awareness of investment opportunities are encouraging individuals to allocate more funds towards professionally managed products. Additionally, the government's initiatives to promote financial inclusion and encourage long-term savings are further propelling market growth. Despite its positive outlook, the South Korean asset management market faces challenges. The 2017 mis-selling scandal significantly eroded investor trust in the industry, requiring asset managers to strengthen compliance practices and rebuild trust through client-centric approaches. The market also faces competition from robo-advisors and other technology-driven platforms offering low-cost investment solutions. Additionally, the relatively low interest rate environment presents a challenge for generating attractive returns for investors, potentially hindering future market growth.

In terms of components, the market primarily comprises software and services. Software solutions are witnessing significant growth, driven by the escalating adoption of cloud-based platforms and the burgeoning demand for data-driven insights facilitating informed decision-making processes. Meanwhile, service-based offerings, encompassing consulting, implementation, and support services, remain integral for successful software adoption and the maximization of its value proposition.

Moving to asset types, the market classifies assets based on their unique characteristics and management requisites. Notably, digital assets, including intellectual property, software licenses, and customer data, are gaining prominence in light of the growing emphasis on digitalization, thereby necessitating robust strategies to optimize their value and security. Traditional assets, spanning returnable transport assets (RTAs), in-transit assets, manufacturing assets, and personnel/staff, underscore the diversified landscape of asset management needs, encompassing tangible assets critical for supply chain logistics, transit security, manufacturing efficiency, and workforce optimization.

Moreover, the market caters to industry-specific requirements through dedicated applications, such as infrastructure asset management, enterprise asset management (EAM), healthcare asset management, and aviation asset management, each tailored to ensure the longevity, safety, and optimal performance of assets within their respective domains. Furthermore, the market extends its purview to encompass solutions for managing assets across various sectors, including IT, facilities, telecommunications, and rail transportation, thereby reflecting its comprehensive nature in addressing diverse organizational needs.



Regulatory oversight in South Korea's asset management sector is overseen primarily by the Financial Services Commission (FSC) for financial services, including asset management companies (AMCs), while the Korean Stock Exchange (KRX) regulates stock exchange activities. The Capital Markets Act (CMA) establishes the legal framework for AMCs, covering licensing, capital requirements, and investor safeguards, while the Public Fund Management Act (PFMA) governs public pension funds and assets. The Act on the Transborder Transfer of Financial Information (ATFI) regulates international asset management. Professionals within AMCs must hold qualifications like CPA or CFA designations, outlined by the Financial Investment Services and Capital Markets Act (FISCAM). Despite opening to foreign investment, restrictions persist, requiring foreign AMCs to establish local entities and adhere to ownership quotas. Compliance is monitored by the FSC, focusing on risk management, disclosure, and reporting obligations encompassing portfolio composition and performance metrics.
South Korea's asset management market is on a trajectory of significant growth, driven by a confluence of favorable demographic and economic factors. While challenges exist, the market offers substantial opportunities for asset managers who can adapt, innovate, and prioritize client needs in a responsible and transparent manner.