South Korea’s capital markets have had a tough 12 months. Repeated delays of deals by the country’s family-run conglomerates, the shock of a $1.5 billion real estate investment trust IPO being pulled and an increasingly heavy-handed regulator have made business conditions difficult.
But there is still a desire for deals. And always capitalizing on that are NH Investments & Securities and Korea Investment & Securities. The pair are the stalwarts among Korea’s securities houses. This year, NH I&S is top dog.
Jeong Young-Chae is chairman and chief executive of the firm, and despite the paltry stock of deals of late, NH worked on 23 deals, raising $1.5 billion during our awards period. As a result, it is third in the league tables behind only Citi and Goldman Sachs, according to Dealogic data.
Most of the business was small, but it managed to facilitate a series of large equity trades during the period. The firm sole-led a $149 million listing for Hyundai Autoever Corp in March and worked with Citi on a $212 million follow-on for Korea Aerospace Industries in July 2018. NH was also able to set aside its rivalry with KIS and pull off the largest deal during the last year, a fully marketed $404 million block in Doosan Heavy Industries & Construction.
The award winner also showed off the extent of its local prowess this year: it was sought out to be sole bookrunner for a whole host of IPOs, follow-ons and block trades worth $100 million or less.
Along with other local Korean firms, NH was lucky to avoid the disaster of Homeplus Reit, which attempted to be the country’s first bona fide such listing. The trust shot for $1.5 billion in a not-so-strong market and then had to shelve the deal for lack of demand.
There is interest in Reits in Korea from investors and issuers, and various conglomerates with valuable property were waiting to see how Homeplus would go, according to a banker at NH. The deal, which was run by Citi and Goldman Sachs, relied heavily on international investors to cover the deal, paying too little mind to the portion reserved for Korean investors.
When the next Reit issuer comes looking for local expertise, savvy firms such as NH will no doubt be sought after.
Also, when Korea’s pipeline of billion-dollar IPOs gets flowing again, NH will likely be front of mind. It was mandated as a lead manager for Hyundai Oilbank’s $1.9 billion listing, delayed last year, and is one of two leads on the $1 billion-plus Kakao Page IPO, which is expected in 2019.