Mirae Asset Securities’ New York office CEO Jae Ryu talks about competing against global institutions on Wall Street and surviving concrete jungle


NEW YORK CITY -- Located a few blocks north of the bustling tourist hub of Times Square on 7th Avenue in Manhattan, a South Korean brokerage house has been standing its ground for more than two decades.

“It’s been nearly 25 years since our foray into Wall Street,” CEO of Mirae Asset Securities’ New York office, Jae Ryu, told The Korea Herald on July 1.

“The significance of having a foothold in New York is that the office itself contributes in establishing a brand image that helps global expansion and general marketing of the company,” he added, in the meeting room of the office on the 37th floor of a Class-A skyscraper.  

Mirae Asset Securities’ New York office CEO Jae Ryu poses for a photo in the meeting room of the firm’s office at 7th Avenue, Manhattan, New York, July 1. (Jung Min-kyung/The Korea Herald)

But the fickle and hypercompetitive nature of Wall Street also pushes the firm to keep up the pace.

“At the same time, it wouldn’t make sense to claim we deal with global investment banking without making ourselves known here,” he said.

Mirae Asset’s New York office has made significant progress over the years, venturing into unchartered financial territories and bolstering its strengths. 

It reported a net income of 3.6 billion won ($3.1 million) for fiscal 2018, moving to positive terrain after years of remaining in the red. The figure contributed to parent company Mirae Asset Daewoo’s overall robust overseas earnings of 89.42 billion won for the year, which more than doubled from 38.28 billion won in 2017.

This happens to be a noteworthy earnings report for a Korean brokerage in New York. The corresponding figure for industry rival Samsung Securities’ New York subsidiary plunged to 541 million won in 2018 from 3.1 billion won, in the same period. 

“Most Korea-based brokerages here are focused on selling Korean stocks to US hedge funds and institutional investors,” Ryu said.

“We were in the red in recent years because we raised about $2.5 million in capital in 2016 and so forth, to invest in infrastructure and workforce. It’s inevitable to face that sense of loss in the situation, but now we are certain that it was a necessary step to take.”

As investment banking and prime brokerage service continue to be key businesses for global brokerages, Mirae Asset New York is also vying to provide an all-around and localized service for clients.

Mirae Asset is the first Korean brokerage to start a prime brokerage business in the US market.

“We are trying to expand our prime brokerage services, which we launched in 2016. Qualifying for a portfolio margin account, which is overseen by the US Financial Industry Regulatory Authority, is among the goals, and we expect licenses to be issued by end of August,” Ryu said.

Portfolio margin refers to the modern composite-margin requirements that must be maintained in a derivatives account containing swaps, options and futures contracts.

In January, Mirae Asset also took an extra step with its IB involving real estate, as it extended financing for fixed-income securities worth $375 million to fund TSX Broadway, a real estate revamp project to build a 46-story building at Times Square, near its New York headquarters.

TSX Broadway, a $2.5 billion hotel-and-retail redevelopment project, involves erecting a landmark tower in Manhattan by renovating the century-old Palace Theater. The renovation is scheduled to be completed by 2021.

Outside its portfolio, a key characteristic that distinguishes Mirae Asset Securities from most Korean financial institutions in the US, is its diverse workforce suited for localization, according to Ryu.

The New York office consists of around 65 employees, with the majority hired through the local human resources team. The business is divided into four parts, and at the moment, there is only one employee dispatched from the Seoul headquarters for each team.

“In order to understand and work with the market, you need a local workforce,” Ryu said.

On latest issues, such as the stock transaction tax cut in South Korea and the US-China trade dispute looming over the global finance market, Ryu shared both cautious and bold opinions.

The Korean government’s decision to lower the tax on securities transactions on key bourses by 0.05 percentage point took effect in late May.

“The decision to lower the stock transactions tax could send a positive signal to the market, but in order for the market to become truly active, the products need to become more diverse and attractive. Creating a lucrative ecosystem that could lure investors into buying stocks that could benefit one another is very important,” Ryu said.

On the uncertainties stemming from the US-China trade war, Ryu said the volatile mood is expected to linger for a while, as US President Donald Trump is engaged in a power struggle with China, which he needs to play out smoothly in line with his reelection campaign.

And in the midst of it all, Mirae Asset New York will continue to build its unique identity as a Korean firm adaptable to the US market.

“In Korea, it’s more about building a relationship in the deals, which provides a sense of stability in closing a deal. But institutions often face more variables here because clients are offered more attractive commissions and offers along the way,” Ryu said.

“But that’s just the Wall Street way.”

By Jung Min-kyung / The Korea Herald (mkjung@heraldcorp.com)