S. Korea’s top 6 family-owned conglomerates enjoy high-flying growth amid fall of ‘legendary salary men’

September 13, 2013 Leave a comment

S. Korea’s top 6 family-owned conglomerates enjoy high-flying growth amid fall of ‘legendary salary men’

2013.09.12 17:04:07

South Korea’s six largest family-owned conglomerates have witnessed accelerating growth even amid the fall of Woongjin Group chairman Yoon Seok-geum and STX’s former Chairman Kang Deok-soo, once dubbed as ‘legendary salarymen.’ Of the total assets held by 51 largest conglomerates with assets of five trillion won ($4.6 billion) or more, which are subject to limitations on total equity investment, Samsung Group, Hyundai Group, LG Group, SK Group, Lotte Group and Hyosung Group took up 67.7 percent late last year, up 8.2 percentage points in five years from 59.5 percent in late 2007. The nation’s 18 companies belonging to the six family-owned business groups doubled (100.8 percent) from 525 trillion won in 2007 to one quadrillion late last year. Over the corresponding period, the combined assets owned by the six large conglomerates grew merely 76.4 percent from 883 trillion won to 1.5 quadrillion. The combined assets of the remaining conglomerates went up 40.7 percent, accounting for less than half of the combined assets of the six conglomerates. 
The nation’s gross domestic production (GDP) grew 30.5 percent during the cited period. Net asset of the six largest family-run companies climbed sharper than their assets. 
Their net profit added 63.3 percent from 37 trillion won to 60 trillion won, the share also expanded a startling 25.4 percentage points from 65.6 percent to 91 percent. The six largest groups generated 60 trillion won profit, dwarfing other group’s six trillion won. 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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