Corporate restructuring is the key
The group started off as a corporate restructuring company and grew in size by acquiring, restructuring and selling firms. After a series of non-hostile M&As, it now has eight subsidies providing financial services ranging from capital, asset management, investment and securities, financial advisory services and property management, among others. Its clientele ranges from retail and corporate clients to government and foreign clients.
The first three years after the group’s founding were its most dynamic. It did corporate restructuring and M&As for ailing companies, including Shinho Steel, Newcore Department Store, Crown Co., Byucksan Engineering & Construction and Samick Musical Instruments.
As of the end of 2008 - for Golden Bridge Investment & Securities and Golden Bridge Asset Management the figures are from March 2009 - the group’s sales (excluding sales from three subsidiaries, each of which is less than a year old) exceeded 93.3 billion won ($75.9 million) while its operating profit was around 9.2 billion won. Over the past seven years, Golden Bridge group has seen its annual growth in net assets double and has garnered over 100 percent in investment returns. Although still very young and relatively small in size, the group has built up its strength through corporate restructuring and M&As.
Take Golden Bridge Capital, for example. The company’s founding is tied to Ssangyong Finance, which was established in 1994 and renamed Ssangyong Capital in 1997, an auto financing subsidiary of the now defunct Ssangyong Group. In the wake of Ssangyong Finance’s ailments resulting from the Asian financial crisis, Golden Bridge paid 1 won to acquire the company and take over its assets and debts. A year and a half after it was acquired by Golden Bridge, Ssangyong Capital managed to turn a profit. The company had not seen a surplus since its founding. After four years, the group sold the company’s automotive installment financing division to Woori Financial after restructuring, earning 35 billion won from the deal.
Golden Bridge Investment & Securities, the group’s only listed company, is also a successful M&A effort by the. The company was formerly Daeyu Securities, which was established in 1954. After merging with Ileun Securities, a subsidiary of Standard Chartered First Bank (formerly Korea First Bank), it changed its name to Bridge Securities. In 2005, the Golden Bridge Group acquired the firm, which was referred to by many financial experts as one of the true survivors of the harsh Korean securities sector. As of March this year, the company turned in the biggest sales for the group at 39.5 billion won.
Most recently, Golden Bridge won U.S. regulator approval to purchase Positive Delta Asset Management this June. The company will be renamed Golden Bridge Positive Delta.
As chairman of the group, Ly Sang-joon’s philosophy about money seems rather transcendental in nature. “My philosophy about money is that it is a tool for changing the world,” he said. “I’ve found the more money you give, the more it comes back to you.”
On the skill required to orchestrate M&As, Ly said, “The M&A sector is rough. Besides needing expertise, you also need to control the communication process as well as be able to gather money when necessary. In fact, although the Golden Bridge Financial Group’s expertise is lacking compared to that of larger financial groups, we are skilled at giving options to companies at the end of their rope.”
Ly is also a Korean descendant of the royal family of the Ly Dynasty in Vietnam. Hence, the chairman uses the Vietnamese “Ly” instead of the Korean “Lee.” Ly has lived a rather full life. It took him 17 years to graduate from the engineering department at Seoul National University because he spent so much time as an active participant in labor movements in Busan when he was in his twenties. In the 1990s, he started and folded seven small business ventures before founding Golden Bridge in 2000.
Kang Sung-doo, CEO of Golden Bridge Investment & Securities, is no stranger to hard work. Another Seoul National University alumni, Kang was a labor activist whose first job was a handyman at a shoe factory in Guro just after graduating from university. He also worked for a time as a mechanic at a small machinery factory in Munrae-dong; later, he set up a labor union, enlisting workers from area factories. The union preceded the Metal Union’s Seoul branch. In 1994, he started work in the sales division of Hanssem, a Korean furniture company. He moved on to MaxLite, an energy-saving lamp wholesaler, traveling all around the world. He joined the Golden Bridge Group in 2000, serving as CEO of the group’s asset management unit before becoming head of the investment and securities division last year.
Park Jun-ho, CEO of Golden Bridge Capital, was appointed to his position last April. Another Seoul National University graduate, Park has worked in finance throughout his career. Before joining Golden Bridge, he was employed with Seoul Bank, Korea Technology Investment Corp., Nexus Investment Corp. and C& Group.
Koo Ja-kap, CEO of Golden Bridge Asset Management, is yet another Seoul National University alumnus. After graduating from the school’s law department, he went on to become the head of the strategy and planning division at Chohung Bank (now Shinhan Bank). He was an executive at KTB Securities before joining Golden Bridge in July 2008 in his present position. He is known to emphasize having a sturdy foundation, instead of relying on scale or financial trends.
Moon Goo-sang, CEO of Golden Bridge Vietnam, heads one of the most crucial businesses for the group in terms of its overseas operations. Golden Bridge Vietnam, established in 2006, has alliances with the central and regional governments in Vietnam as well as the central bank.
Most financial experts were optimistic about Golden Bridge’s core overseas venture in Vietnam.
“It is quite a smart move for local financial companies to look overseas,” said Choi Jeong-won, an analyst at Tong Yang Securities, in a report. “However, the Vietnamese financial market is still in its early stages of development so although it has a great deal of potential, there are also big risks involved as well because the country is still very unstable politically.”
Moon, a Busan National University graduate, was former head of Golden Bridge Investment & Securities’ Overseas Business Team as well as the former CEO of Oullim Soft. Along with Golden Bridge Vietnam, the group launched Hanviet Foundation in 2007, with a $3.2 million fund, mostly composed of private funds donated by the chairman. The foundation gives scholarships to Vietnamese students and helps underprivileged Vietnamese living in Korea and Vietnam.
“Faces inside Korea’s conglomerates,” a regular weekly series about key figures in the nation’s major companies, will also feature major figures within Korea’s large financial groups.
By Cho Jae-eun [jainnie@joongang.co.kr]
with the Korea JoongAng Daily
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