Shinhan Financial Group has purchased the 35% stake in Shinhan BNP Paribas Asset Management held by French asset manager BNP Paribas Asset Management, marking the end of a 19-year partnership between the two companies.

With the January 15 deal, Shinhan BNP Paribas Asset Management has become a wholly owned subsidiary of Shinhan Financial, a holding company that previously owned 65% of the firm. Its name was also changed to Shinhan Asset Management, a decision endorsed by a special shareholders meeting on the same day.

The South Korean holding company and French asset manager set up Shinhan BNP Paribas Asset Management as a joint venture in 2002, and it utilized know-how from BNP Paribas Asset Management to launch a series of fund products branded as Bonjour funds, which were a big hit in the late 2000s.

However, net new assets started to decline as the popularity of overseas funds subsided. Some observers said that the partnership did not create many strategic synergies and believed BNP Paribas Asset Management was mostly a financial investor interested in dividend income. That view was reinforced when the French company voted against a dividend cut proposed by management of Shinhan BNP Paribas Asset Management in a special shareholders meeting in October last year.

The decision to end the partnership appears to be a mutual agreement for the sake of the asset manager’s long-term growth, industry watchers said.

Shinhan Financial has been focusing on expanding its non-banking business to improve profitability, so it will likely support the asset manager’s plans to cut dividends and retain more equity capital – a formula used by the country’s other major asset managers – to increase investments in overseas markets.

Shinhan Financial and BNP Paribas are expected to continue to work together in areas such as environmental, social and governance (ESG) investing.

“We will focus on implementing our strategic plans to grow further and strengthen our market position,” Shinhan Asset Management said. “We plan to increase investments in alternative assets to meet diversified needs of investors and also cement our position as a leader in ESG investing.” (Reporting by Yu-hyun Jung)