The corporate finance (IB) market is currently facing a freeze due to rapid interest rate hikes, which have dampened corporate funding and the bond market. Amid this challenging environment, NH Investment & Securities has achieved remarkable success in corporate governance consulting and public offerings.
To understand the secrets behind NH Investment & Securities' rise as a new IB powerhouse, Aju Economy interviewed Taesik Wang, head of the Industry 3 Division. Wang, a 25-year IB expert, joined LG Securities in 2002 and has held various roles, including RM for major corporations and head of the SME division.
"Interest Rate Hikes Lead to 30% Reduction in Corporate Bond Issuance"
Wang identified the most significant challenge currently faced in the IB field as the contraction of the funding market due to rapid interest rate increases.
He stated, "As interest rates have risen quickly, issuers are struggling to adapt to the high rates, and investors have significantly reduced their demand due to bond losses and instability. The total annual corporate bond issuance has decreased by about 30%."
Wang added, "While there may be a temporary surge in demand at the beginning of the year when new funds are deployed, it will be difficult for the bond market to return to its previous boom. Large corporations are increasing bank loans for funding, but small and medium-sized enterprises with lower credit ratings find it nearly impossible to issue unsecured corporate bonds."
He particularly pointed out the funding difficulties faced by KOSDAQ-listed companies, noting, "With stock prices falling, it is very challenging to make decisions on mezzanine financing or capital increases due to concerns about the decline in major shareholders' ownership. Small and medium-sized enterprises should prioritize bank loans and actively utilize policy funds, such as P-CBO (Primary CBO), which bundles SME bonds guaranteed by the Credit Guarantee Fund."
"The Key to Success in Governance Consulting and Public Offerings"
In this deteriorating market environment, NH Investment & Securities has managed to secure numerous governance consulting projects and large public offerings. Wang attributes this success to their 'RM-centered comprehensive total service.' He emphasized that companies facing funding challenges require more than just simple bond issuance; they need complex solutions, including governance restructuring and M&A, which are provided by RMs.
Wang explained, "Many other securities firms have separate DCM and ECM departments. In contrast, the Industry Division at NH Investment & Securities has RMs who comprehensively handle all funding and restructuring needs directly from the companies."
He continued, "RMs serve as the main point of contact for companies, managing funding, splits, and mergers directly, while connecting IPOs to the ECM division, M&A to the Advisory division, real estate development to the real estate infrastructure division, and asset management to the sales and customer asset management divisions."
Indeed, NH Investment & Securities has effectively monopolized major governance restructuring consulting projects, including advisory roles for Hanwha Group's split, Kakao's split, Cowell Fashion's human split, and the KOSPI listing of BH. They have also successfully executed public offering deals linked to private equity fund M&As, such as Osstem Implant and Lock & Lock.
Wang noted, "The results of public offerings and consulting are not achieved overnight. They are the result of long-term close monitoring of companies and providing comprehensive services, along with internal synergies."
Currently, the Industry Division at NH Investment & Securities is structured into six teams under the 1st, 2nd, and 3rd divisions to expand their reach, covering a wide range of clients from general corporations to financial institutions, public enterprises, private equity funds, and small to medium-sized enterprises. The number of RMs, with 3 to 5 members per team, is also at a unique level compared to other firms.
"Promoting RMs with Solid Practical Experience"
Wang highlighted another competitive advantage of NH Investment & Securities' IB division: the 'RA (Assistant) development policy.'
He stated, "We likely have the largest number of RAs. To provide appropriate advice to corporate finance executives, RAs need to have solid practical knowledge, so we aim to develop an ideal model where RAs gain at least 2 to 3 years of diverse deal experience before being promoted to RM positions."
Wang emphasized, "While someone may become an expert in a specific product after handling it for several years, they may lack experience in various deals. Our talent, who have robust practical experience from corporate bond issuance to restructuring consulting, can thus achieve superior work capabilities compared to other firms."
* This article has been translated by AI.
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