이 기사는 2020년 01월 23일 08시00분 thebell에 표출된 기사입니다

South Korea’s KB Securities is said to have purchased more than 700,000 shares of IGIS Asset Management stock in a secondary offering, as the brokerage house puts its focus on the real estate investment trust (REIT) sector.

IGIS Asset Investment, the country’s largest property investment firm, sold 700,010 shares worth about 20 billion won ($17 million) to KB Securities in the form of a secondary offering conducted last December, sources with knowledge of the matter said. KB Securities reportedly made the payment of the subscription through its principal investment vehicle.

IGIS is estimated to have total outstanding shares of about 16.23 million as of the end of 2019. Based on the number, KB Securities’ stake in IGIS is at about 4 percent, making the brokerage firm one of the key shareholders in the asset manager.

Market watchers say that KB Securities has apparently made a strategic investment in IGIS’ equity interest in a bid to strengthen its business partnership with the real estate asset manager.

This year, KB Securities intends to increase its marketing effort in the real estate sector, as the growth of REITs could lead to an increase in its fee revenue. Its partnership with IGIS – which has a diverse portfolio of high-quality properties and manages large real-estate funds – is therefore considered to be beneficial.

Indeed, KB Securities has recently been named one of the underwriters for a REIT initial public offering planned by IGIS. The REIT is backed by Twin City Namsan Tower, an office building located in one of Seoul’s central business districts.

Observers say more brokerage firms targeting the REIT sector could follow suit, as real estate funds currently own most of the domestic high-quality commercial properties. Also, increasing investor interest in funds of real estate funds after the recent success of NH Prime REIT could make the partnership with asset managers more beneficial for brokerage firms.

Some market watchers, however, warn that such a strategy could backfire in the mid-to-long term. “A strategic partnership with one asset manager could lessen the burden of sourcing deals, but this could be a reason for being excluded from other deals involving rival asset managers.”

(By reporter Jeon Kyung-jin)