Consider the position of a Korean hedge fund manager in 2025. The KOSPI is at record levels. International allocators, reassessing their China exposure and drawn by Korea’s deep semiconductor and artificial intelligence supply chain, are paying attention to Korean strategies in a way they have not before. Short selling has returned after a two-year ban. The capital is there, the interest is genuine, and the opportunity is real.
A global allocator willing to invest in a Korean manager will typically want to do so through a separately managed account, and use one of the global tier 1 prime brokers. Reporting requirements need to meet international standards, a compliance framework that is recognised and a level of transparency that allows them to monitor their allocation in real time. In short, infrastructure that most Korean managers have never needed to build, because until recently, they never needed to look beyond their domestic investor.
That gap — between the opportunity now available to Korean hedge fund managers and the operational infrastructure required to capture it — is what is driving a quiet but significant transformation in how Korea’s most ambitious managers are organising themselves.
Offshore fund structures are being established. Teams are moving to Singapore and Hong Kong. Global prime broker relationships are being built. And institutional-grade portfolio management technology, largely absent from the Korean market until now, is becoming a practical necessity.
It is against this backdrop that Enfusion by CWAN has onboarded multiple Korean hedge fund managers in recent years, among them Dunamis Asset Management, Exponential Investments, Midas Asset Management, Qraft Capital and Meridian One Asset Management. The number is notable not only as a measure of commercial progress, but also as a reflection of how quickly the market is moving.
Korea has long operated a highly self-contained financial ecosystem. Managers have historically worked with domestic brokers, domestic systems, and reporting standards oriented toward local investors. For global allocators seeking exposure to Korean strategies, this created real friction. Reports looked unfamiliar, disclosure conventions differed, and monitoring portfolio risk in real time was difficult. The market was not built with international investors in mind. Three developments have now converged to change that.
The KOSPI has risen into record territory above 4,200 in 2025, making it one of the strongest-performing major equity indices globally. That performance has sharpened the focus of international allocators who might previously have treated Korean equities as a secondary consideration within a broader Asia-Pacific allocation.
Korea’s position in the global semiconductor and artificial intelligence supply chain adds a structural dimension to that interest. As allocators reassess their exposure to China amid ongoing geopolitical uncertainty, Korea offers an alternative with genuine sector depth in technology hardware, a liquid equity market, and a regulatory environment that is actively modernising. For a growing number of global institutional investors, Korean hedge fund strategies have moved from peripheral to relevant.
South Korea reinstated stock short selling on March 31, 2025, following a period of regulatory reform focused on improving market monitoring and controls. The ban, in place since 2023, had constrained the range of strategies available to hedge fund managers in the Korean market.
Its removal reopens the opportunity to run long/short equity strategies and market-neutral mandates, approaches that many global institutional allocators regard as a baseline requirement from the hedge fund managers they back. For Korean managers seeking to attract international capital, the ability to offer these strategies is a meaningful and timely development.
Separately managed accounts (SMAs) have become an increasingly prominent feature of how global institutional allocators deploy capital to hedge funds. According to the BNP Paribas 2026 Hedge Fund Outlook, capital allocated globally via SMAs grew from USD 26 billion in 2023 to USD 42 billion in 2025, a 61 percent increase driven primarily by allocator demand for greater transparency, control, and customisation.
Korean managers are encountering this trend directly. Allocators interested in Korean strategies are increasingly structuring their investments as SMAs, specifying their own prime broker relationships, reporting standards, and risk parameters as conditions of investment. For a Korean manager accustomed to running a single commingled fund, this represents a genuine operational step change.
Managing multiple SMAs is not a matter of replicating a single fund several times. Each account carries distinct risk limits, investment guidelines, and reporting requirements. The operational complexity scales non-linearly. A manager running ten SMAs is managing ten distinct mandates simultaneously, each with different constraints and different investor expectations. The infrastructure adequate for one fund does not extend to five or ten without significant investment in systems and process. This is one of the most direct drivers of demand for institutional-grade portfolio management technology among Korean managers making this transition.
The response from Korea’s more internationally-oriented managers has been structural as well as operational. A growing number are establishing offshore fund vehicles, typically Cayman structures, to meet the expectations of global allocators who are more comfortable investing through familiar legal frameworks. Some are relocating teams to Singapore or Hong Kong, where established licensing regimes and governance frameworks provide the kind of auditable operational foundation that institutional investors expect. For managers whose investor base has historically been domestic, this represents a fundamental reorientation — not just of legal structure, but of how the entire operation is run, reported, and governed.
Operating an offshore fund, engaging global prime brokers, meeting international reporting standards, and supporting allocator due diligence all require capabilities that local Korean systems were not designed to provide. The managers making this transition are, in effect, rebuilding their operational infrastructure from the ground up, while continuing to manage their investment strategies.
The convergence of short selling returning, SMA demand increasing, and Korean managers building out offshore structures creates a specific set of operational requirements. Enfusion by CWAN’s platform and APAC market position address several of them directly.
Enfusion by CWAN’s latest platform updates include enhanced short-sell inventory tracking capabilities, developed for markets where short selling has resumed or is expanding. Through a partnership with a leading local short inventory provider, the platform gives Korean managers real-time data and robust market coverage, supporting the implementation of long/short strategies and the associated risk management processes.
The platform is designed to support managers running multiple SMAs alongside other fund structures. Enfusion by CWAN works with global and Korean SMA allocators to develop workflows that are allocator-friendly and that scale as a manager’s book of mandates grows. Built-in fair allocation functionality allows managers to demonstrate equitable treatment across all accounts, a requirement that surfaces regularly in institutional due diligence and one that global allocators take seriously.
Enfusion by CWAN’s cloud-native platform integrates trading, portfolio management, risk, accounting, and reporting within a single system. For Korean managers transitioning from locally-oriented operations to an international standard, this has direct practical consequences. Investor reporting can be generated from the system to the specifications that allocators require. Portfolio and P&L data is maintained at the level of accuracy that institutional investors expect. The compliance framework built into the order management system provides an auditable record that supports investor confidence throughout the due diligence process.
Enfusion by CWAN works with more than 250 clients across Asia-Pacific, giving the platform a broad presence across the regional hedge fund community. That reach has a practical consequence for Korean managers seeking to build relationships with global allocators. When an institutional investor conducts due diligence on a manager and encounters a platform they already know and trust, it reduces friction in the allocation process. For Korean managers establishing themselves with international investors for the first time, the operational credibility that comes with running on a widely recognised platform is a tangible advantage.
Onboarding a Korean hedge fund manager is not a standard implementation. Korean teams bring different operational conventions, different systems backgrounds, and different starting points of familiarity with global market practices. The practical challenges of transitioning a Korean team to an internationally-oriented operational infrastructure are specific and not always obvious in advance.
Having worked through this process many times, Enfusion by CWAN’s implementation team has developed a detailed understanding of where Korean managers need more support, where the transition is most demanding, and how to manage onboarding in a way that achieves operational readiness without unnecessary disruption to the business. For a manager embarking on international expansion, the difference between an implementation partner who has navigated these specifics before and one who has not is a material consideration.
Korea’s hedge fund market is at an early stage of internationalisation. The structural changes now underway — the return of short selling, growth in SMA mandates, offshore fund formation, engagement with global prime brokers and allocators — represent the beginning of a longer transition. The managers moving now are doing so because the conditions are right and the demand from global allocators is real. Those who build the right operational infrastructure at this stage will be better positioned to compete for international capital as the market continues to develop.
Enfusion by CWAN is building its presence in the Korean market with that trajectory in mind. Its growing client relationships, the local market partnerships, and the depth of Korean-specific onboarding experience position it to support Korean managers as their operational complexity and international ambitions grow in parallel.
For Korean hedge fund managers considering how to build the infrastructure to support that growth, Enfusion by CWAN welcomes the conversation.
This article is for informational purposes only.
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