An Investor Who Sees The Future미래를 보는 투자자

Gihong had a tendency to become talkative when drunk. With his face flushed, he continued to speak his mind.

“For decades after the Korean War, the manufacturing industry grew dazzlingly. There were dozens of well-known companies like Seong Electronics or Eunsung Motors. However, is there a single financial institution among banks, securities firms, or fund companies that foreigners would recognize?”

“No.”

“On the other hand, international investment banks like Pech, Moody’s, JP Morgan, Morgan Stanley, and Goldman Sachs are encroaching on the Korean market. Who is the leading company in Korea?”

Min-young responded, “Seong Electronics.”

“Everyone says that. But frankly, is Seong Electronics really a Korean company?”

“The chairman is Korean. It’s listed on the KOSPI.”

“Then what about the Chinese e-commerce company Alibaba? CEO Jack Ma is Chinese, but the company is listed on the New York Stock Exchange. And what about Lotte Group? Many of its subsidiaries are listed on the stock exchange, and although most of its revenue comes from Korea, the chairman is a Korean-Japanese and the holding company is in Japan.”

“Well…”

Gihong interjected, “Foreigners hold 53% of Seong Electronics shares. Half of the market capitalization is divided among foreign IBs, wealth funds, private equity funds, and pension funds. Seong Electronics is not alone in this situation. A third of the stock market is owned by foreigners. Yet every year, when the season comes, the media starts clamoring about how much foreigners took in dividends, or how much they made from the price difference.”

“Isn’t it natural for them to take profits if they invest?” I asked.

Gihong nodded, “Right. That’s exactly what I’m trying to say. Who owns the multi-story buildings in Yeouido? The hotels along the Han River? The franchise chains like Hengbune Jjigae, Lydia Coffee, Master Pizza in every neighborhood? They are all owned by foreign capital. Even the QB beer we are drinking now!”

While drinking SoMaek (Soju and beer mixed together), Kyeongil, burping, said:

“Isn’t QB Beer ours?”

“You think all Korean beers taste bad? Jusan Group sold it to KRR, which is a British PEF. KRR then sold it to TM Consortium five years later. Made a profit five times its value.” Sunbae Gihong, looking frustrated, said:

“During the IMF crisis, many domestic companies were sold off to foreign capital at cheap prices. Back then, Soseong Electronics bought for 30,000 or 50,000 won are now over 1.4 million won. Since the 2008 financial crisis, foreign investment banks have completed restructuring and are aggressively investing again, while Korean investment banks are lagging behind. Why can’t we do it like them? The world is changing rapidly with the Fourth Industrial Revolution, fintech, blockchain. If finance cannot keep up with these trends, we may face similar problems as before.”

Sunbae Gihong continued with a twisted tongue,

“There may be great entrepreneurs, but there are no great investors. That’s the reality of this country. But now we need such people in Korea. We must compete confidently with foreign capital. We might face criticism from foreign media for embezzlement.”

This is not just about having money.

Advanced countries have a history and culture of capitalism spanning hundreds of years, while our financial sector is still in its early stages.

“Will that day come?”

To my question, Sunbae Gihong replied with a wry smile,

“Well, who knows, maybe.”


As they laughed and chatted while drinking, someone’s phone rang.