Samsung Securities’ IB head to quit amid talent outflow

Lee Jae-hyun, who has led one of Samsung Securities Co.'s investment banking divisions for two years, has recently expressed his intention to quit, said sources with knowledge of the matter on Friday.

Lee, who also goes by his English name Jake Lee, was a keyman for Samsung Securities, overseeing advisory and underwriting businesses for M&As, initial public offerings and bond issues.

The former head of Goldman Sachs PIA’s Korean operations joined Samsung in 2022 to fill the void left after Shin Won-jeong, an ex-investment banking head and senior managing director at the brokerage house, moved to Samsung Group’s think tank Samsung Global Research in 2021.

At the time, Samsung Securities suffered a leadership vacuum after its former vice president Lim Byungil left to join Samsung Electronics Co.’s M&A team in 2021.

Since Lee took the helm of Samsung Securities’ investment banking operations, the company has secured a series of mandates for high-profile M&A deals, including the tender offer by BTS company HYBE Co. for K-pop pioneer SM Entertainment Co. in 2023. The offer fell through.

He also spearheaded the flopped $5 billion sale of HMM., South Korea’s largest container shipper, to poultry processor Harim Co. But it received nothing for its one-year work on the deal, which could have generated up to 51.8 billion won ($37.6 million) in fees if the deal had gone through.

The collapse in the deal hurt its reputation.

Invest Chosun, a domestic online news outlet, reported on Thursday that Lee is moving to a global private equity firm, probably Apollo Global Management.

Samsung Securities also advised Hanmi Pharmaceutical Co.'s founding family’s two sons on their attempt to sell stakes in Hanmi Science to two US investment firms: KKR & Co. and  Bain Capital LP.

EQUITY CAPITAL MARKET

In the equity capital market, Samsung has lost its luster due to the high turnovers of its IPO heads, including Kim Byungchul and Yoo Jang-hoon. Kim worked for over 20 years at Samsung Securities before moving to Yuanta Securities in early 2021. Yoo quit last year.

Industry observers said that Samsung has managed to win some IPO mandates after their departures, but they were related in large part to its wealth management business and credited to its affiliate Samsung Electronics Co.

Early this year, it won billion-dollar IPO underwriting deals, including for machinery company DN Solutions Co. and Megazone Cloud Corp., its first high-profile IPO deals in two years.

The rank and file at Samsung's syndication and advisory service teams have recently resigned to join rival companies.

An investment banker said that Samsung Securities’ employees recruited through regular volume hiring that takes place twice a year felt relatively deprived compared to those scouted from other companies.

They also complained about its conservative corporate culture and performance bonus payment system, under which the bonuses are paid in installments.

Write to Jong-Kwan Park and Seok-Cheol Choi at pjk@hankyung.com

Yeonhee Kim edited this article.