After spinning off from Timefolio Asset Management's IT division, Osinus acquires Koscom Corporation subsidiary fund administrator [fn Market Watch]

[The Financial News]   Osinus, which became independent from the IT division of Timefolio Asset Management, has acquired Koscom Fund Service, Koscom Corporation's fund administration subsidiary. The acquisition marks the direct entry into the back-office market—including fund NAV calculations and accounting—of a young IT company that has focused on developing investment-management software. The move is seen as an effort to broaden its business base by combining its existing investment-management systems with fund administration services.
According to investment banking (IB) sources on the 13th, Osinus recently acquired the 92.96% stake in Koscom Fund Service held by Koscom Corporation. The acquisition price was not disclosed. The deal has drawn attention because an investment-management IT specialist acquired a subsidiary that Koscom had been seeking to sell due to poor profitability.
Osinus was established last March after the IT division of Timefolio Asset Management became independent. It supplies the asset management industry with Orca, software it developed based on Timefolio's proprietary investment management system (TMS). It has built a customer base centered on small and midsize asset managers by winning system development contracts from firms including Tiger Asset Management and Billionfold Asset Management.
The acquisition is seen as an attempt to expand beyond supplying investment-management IT solutions into fund administration. Linking asset managers' order and portfolio management with back-office tasks such as fund accounting and NAV calculations could improve operational efficiency, according to industry assessments.
An Osinus representative explained, “We have been interested in automating the complex back-office operations of asset management companies,” adding, “As we worked to build an independent business base, we identified an administration company that was up for sale and pursued the acquisition.”
Koscom Fund Service was launched after Koscom Corporation acquired HSBC Fund Service from HSBC for 10.4 billion won in August 2020. However, it has been mentioned as a potential sale target as it continued to post losses, weighed down by its relatively small assets under custody and difficulty expanding its market share.
Since the acquisition, Osinus has been prioritizing organizational reorganization and system upgrades, focusing on its existing workforce of around 20. Its challenge will be to stabilize the existing fund administration business while incorporating investment-management IT technology.
Meanwhile, the fund administration market is led by major players such as Shinhan Fund Partners. Because accuracy in NAV calculations and accounting, as well as long-term relationships with asset managers, are crucial, new entrants face a market structure that makes it difficult to rapidly increase their share. IB industry sources see the key question in this deal not as the acquisition itself, but whether Osinus can integrate systems and improve profitability afterward. The company's expansion is expected to hinge on whether it can convert existing investment-management IT clients into fund administration customers.
[email protected] Kim Gyeong-a Reporter