Lotte prepares for pension fund market

By Bomi Lim  |   2008-6-10  |     NEWSPAPER EDITION

SOUTH Korea's Lotte Group has agreed to buy more than 50 percent of Cosmo Investment Management, the nation's largest investment consulting firm, from Japan's Sparx Group.

The exact size of the stake and the price have yet to be decided, Seoul-based Lotte, the industrial group centered on South Korea's biggest department-store chain, said yesterday. Lotte and Sparx, Asia's biggest hedge fund, will jointly manage Cosmo.

Lotte plans to keep Seoul-based Cosmo's current management and turn it into an asset management firm to enter South Korea's pension fund market, Bloomberg News said. Sparx's managing director Masatoshi Fukami is aiming to complete the deal by the end of August.

"We decided to team up with South Korea's Lotte Group as it aims to branch into the mutual fund business," Fukami said.

While declining to specify the price Sparx is seeking, he said "generally speaking" a fair valuation of Cosmo might be 10 percent of the firm's assets under management. Cosmo's assets totaled 326 billion yen (US$3.1 billion) as of May 31.

Sparx owns 68 percent of Cosmo with the remaining 32 percent of the firm owned by Cosmo employees.