Samsung Asset Management will absorb its hedge fund subsidiary Samsung Hedge Asset Management, seeking to enhance efficiency amid escalating market competition, the company said Friday.

“The board of directors has approved the merger, upon judgment that there is little advantage in maintaining (the hedge fund firm) as the competitive private equity market has reduced the total value of trust deposits,” the asset manager said in a release.

Since its establishment as a subsidiary of Samsung Asset Management in January 2017, Samsung Hedge Asset Management has operated nearly 590 billion won ($478 million) worth of trusts.

Of the amount, 380 billion won of bond funds will be operated directly by the acquiring parent company, while the remaining 210 billion won worth of equity funds will be consigned to Samsung Active Asset Management, officials explained.

The asset manager will submit the merger to the Financial Services Commission in May, hoping for approval to acquire the subsidiary on Aug. 1.

“Even after taking over the hedge funds operation from our subsidiary, we will continue efforts to return constant profits to the customers, despite the volatile market,” the company said.

By Jie Ye-eun (yeeun@heraldcorp.com)