This article was published on June 2, 2025, at 4:07 p.m. on the ChosunBiz MoneyMove site.
The small and medium-sized brokerage firm Eugene Securities' strengthening of its 'core IB' is not progressing as expected. The company is facing unexpected challenges in securing its competitiveness in leading initial public offerings (IPOs), despite external recruitment and organizational strengthening. Last year's performance in general IPOs was 1 case, and this year it has recorded '0' so far.
Nevertheless, the company has taken strong measures to strengthen its IPO organization. With large publicly offered stocks disappearing, medium-sized IPO deals have drawn large brokerage firms into the fray, leading to the conclusion that strengthening personnel is key. Evaluations claim Eugene Securities' core IB strengthening is at a crossroads.
According to the financial investment industry on the 2nd, Eugene Securities has not led a single listing (excluding listings of special purpose acquisition companies) by the end of May this year. Starting with the antifungal drug developer Mtex Bio, it aimed to manage 8 listings this year, but Mtex Bio withdrew its application.
Mtex Bio has been noted as a turning point for strengthening Eugene Securities' IPO competitiveness. This is because it is one of the representative listings that Eugene Securities secured after strengthening its IPO organization in 2023, opting for traditional IB expansion and business diversification due to the impacts of real estate project financing (PF) failures.
Eugene Securities set its policy to strengthen traditional IB in line with the real estate market's downturn in 2023. Strengthening the IPO organization was its first step. It recruited Deputy Minister Yu Jang-hoon, previously from Samsung Securities, as the head of the IPO department. Deputy Minister Yu also expanded the organization from one team to two.
However, since the organizational restructuring, the leading results have only reached one for CMES last year. CMES had already selected Samsung Securities as the lead underwriter in 2020, but with Deputy Minister Yu's relocation, it included Eugene Securities as a co-lead underwriter, marking its only achievement.
The increasing hurdles for listings are cited as key reasons for the delay in Eugene Securities' IPO achievements. The Korea Exchange has raised the threshold for listings, promoting the active delisting of stocks. The exchange has also presented a revenue requirement of over 10 billion won for technical special listings.
An official in the securities industry noted, "Brokerages with few IPO leading performances can only handle difficult, low-performing deals, and the exchange's hurdles have also risen," adding that the exchange is presenting the revenue requirement of under 10 billion won for listing reviews.
The disappearance of large IPOs in the market has also become an adverse factor. With competition among brokerage firms intensifying over small IPOs with market capitalizations around 100 billion won, Eugene Securities' position has also narrowed. Major firms are competing to lead even deals under 10 billion won.
Regardless, Eugene Securities plans to continue strengthening its core IB. In April, it promoted Deputy Minister Yu Jang-hoon from the head of the IPO department to the head of the corporate finance department. Recently, it further expanded its IPO organization from 2 teams to 3, appointing a new team leader from NH Investment & Securities.
Eugene Securities is strengthening the scale of its IPO organization and plans to compete with large brokerage firms. This is based on the judgment that it will be easier to collaborate on future corporate bond issuances and capital increases for companies entering the market through IPOs. Deputy Minister Yu will oversee not only the IPO department but also the ECM team in the capital markets division.
Consulting results from the first half of this year also supported this decision. Eugene Securities reportedly commissioned the global consulting firm Bain & Company to enhance its corporate competitiveness from the fourth quarter of last year to the first half of this year, concluding that strengthening the corporate finance sector was essential.
Industry evaluations suggest that Eugene Securities' core IB strengthening is at a crossroads. Although the performance in general IPOs has not met expectations, it has consistently participated in underwriting teams, achieving performance improvements. Last year's IPO department saw commission revenues of approximately 1.3 billion won, an increase from 500 million won the previous year.
An official in the IB industry remarked, "Eugene Securities is now comparable in scale to mid-tier houses based on IPO leading performance. At the same time, how many quality deals it can discover this year while accumulating general IPO leading performances will determine whether it can continue to strengthen its organization."
Meanwhile, Eugene Securities is expected to officially start leading IPOs in the second half of this year. This judgment is based on the fact that it has consistently uncovered deals and conducted due diligence over the past two years since strengthening its organization. It plans to file for at least one general listing every month starting in July, targeting a maximum of seven listings.