Global financial firms are increasingly visiting South Korea. They are expanding their local presence to target Korean retail investors' demand for overseas investment and insurers' and pension funds' demand for alternative investments.

Global alternative investment manager Hayfin held a news conference on Oct. 1 and said it will expand cooperation with Korean institutional investors, centered on its Seoul office.

Last month, executives from U.S. ETF managers Tradr ETFs and Tuttle Capital Management visited South Korea in succession. They explained the current status of Korean investors and the possibility of expanding their product line-up.

Global financial firms are being drawn to the Korean market in part because an investor base is already in place. As Korean investor funds flow into overseas ETFs and alternative investment products, they said the need has grown to directly gauge local demand and strengthen relationships with investors.

U.S. ETF managers are focusing on the high share of investing by Korean retail investors. Russell Tencer (러셀 텐서), chief executive of Tradr ETFs, said at a briefing in Seoul on Sept. 17 that about 10 percent of total assets under management are held by Korean investors.

Matthew Tuttle (매튜 터틀), chief executive of Tuttle Capital Management, who visited South Korea on Sept. 8, also said about 25 percent of assets in T-REX leveraged ETFs jointly managed with REX Financial are held by Korean investors.

Demand from Korean investors is also being reflected in plans for new products. Tencer said he is considering launching products that use KOSPI-listed stocks as the underlying assets, showing interest in Korea's technology industry.

This goes beyond supplying overseas-listed products to Korean investors, extending to reviewing products that use Korean companies as the underlying assets.

Hayfin, which deals with institutional investors, is moving to expand its business based on its Seoul office and strategic partnerships with domestic financial firms. Hayfin has done business with Korean investors since 2016 and said funds it manages from Korean institutional investors were close to 1 billion euros, or about 1.54 trillion won.

It plans to expand assets under management for Korean institutional investors on the back of the opening of its Seoul office and to increase staffing in line with business growth.

A strategic partnership with Samsung Life also underpins its business expansion in Korea. Hayfin signed a strategic partnership last year in which Samsung Life participated as a minority shareholder.

Hayfin said interest and meeting demand from domestic institutional investors have increased since the tie-up with Samsung Life, and that it also helped raise its profile in the Korean market.

It is also targeting institutional demand to diversify investment assets concentrated in the United States. Hayfin said Europe can offer Korean pension funds and insurers, which have already allocated significant funds to U.S. private credit, opportunities to invest in different borrowers and industries and in a different interest rate environment.

Its relationship with Korea is not limited to raising funds. Hayfin said it has deployed more than $1.0 billion, or about 1.36 trillion won, so far to buy ships built at Korean shipyards. It invests by providing capital to companies that own and operate vessels or by directly owning ships.

In Korea's financial investment industry, the scope of future cooperation between overseas asset managers and domestic financial firms is seen as an area of interest. Domestic financial firms can use overseas managers' products and investment capabilities, and overseas managers can secure investor demand and market information through domestic partners.

Choi Si-jin (최시진), Hayfin's Korea representative, said, "We are focused on better understanding the Korean market and institutional investors' needs, connecting them with our global team and improving the quality of client service." He added, "We expect the Seoul office to gradually play a bigger role as it builds relationships and communicates in Korea."