{"id":16988,"date":"2026-09-30T18:34:42","date_gmt":"2026-09-30T13:34:42","guid":{"rendered":"https:\/\/fpl.kz\/?p=16988"},"modified":"2026-09-30T18:36:14","modified_gmt":"2026-09-30T13:36:14","slug":"from-npl-management-to-early-restructuring-the-new-role-of-public-asset-management-companies","status":"publish","type":"post","link":"https:\/\/fpl.kz\/?p=16988&lang=en","title":{"rendered":"From NPL Management to Early Restructuring: The New Role of Public Asset Management Companies"},"content":{"rendered":"\n

From NPL Management to Early Restructuring: The New Role of Public Asset Management Companies<\/strong><\/p>\n\n\n\n

As part of the 10th International Conference of the International Public Asset Management Companies Forum (IPAF) in Astana, organized by the Fund jointly with the Asian Development Bank, the second session, \u201cAMCs for the Next Decade: From Crisis Response to Market Catalyst for NPL Resolution,\u201d was held. The session focused on the transformation of the role of public asset management companies (AMCs) and possible directions for their development amid changing financial markets.<\/p>\n\n\n\n

The session\u2019s keynote presentation, \u201cThe Evolution of Asset Management Companies: From NPL Resolution to Early Corporate Restructuring,\u201d was delivered by Minjae Song, Team Leader, International Cooperation Department Korea Asset Management Company (KAMCO).<\/p>\n\n\n\n

The central topic of the presentation was whether the role of public AMCs should be limited to dealing with already established non-performing loans, or whether their accumulated institutional experience enables them to participate in addressing corporate financial difficulties at an earlier stage.<\/p>\n\n\n\n

The presentation demonstrated the evolution of AMC models over recent decades. In the 1990s, such organizations were primarily established as temporary instruments for responding to systemic financial crises: they acquired significant volumes of NPLs and contributed to the rapid clean-up of banks\u2019 balance sheets. In the 2000s, the model of permanent public AMCs developed, with institutional capacity for continuous work with distressed assets and for carrying out tasks related to maintaining financial stability. In subsequent years, market-based and hybrid models became more actively developed, involving private capital participation, investments in distressed assets, and market-based restructuring mechanisms.<\/p>\n\n\n\n

At the same time, as the speaker noted, there is no universal AMC model. The choice of institutional structure depends on the characteristics of a country\u2019s financial system, the maturity of its market, and the objectives set by the government. Crisis-response AMCs, permanent public organizations, and hybrid market-oriented structures differ in terms of their mandates, the degree of private capital participation, and the range of available instruments. Thus, the issue is not about choosing a single \u201cbest\u201d model, but about adapting the AMC institution to specific economic conditions.<\/p>\n\n\n\n

One of the central questions of the presentation was the possibility of further evolution of permanent public AMCs, from responding to NPLs that have already emerged to addressing corporate financial difficulties at an earlier stage. The traditional model assumes that a company goes through financial difficulties and default, the loan acquires non-performing status, after which the AMC acquires and manages the distressed asset. An alternative approach involves identifying financial problems earlier, carrying out restructuring, and, where necessary, providing temporary financing before a viable company reaches a state of default.<\/p>\n\n\n\n

The presentation emphasized that a company\u2019s financial difficulties generally develop gradually. As its condition deteriorates, access to market financing declines, the value of the business decreases, the probability of default increases, and at the same time the range of available restructuring instruments narrows. Therefore, the timing of intervention is of fundamental importance: at an early stage, a viable company retains more opportunities for recovery, whereas after default, the loss of value may accelerate significantly.<\/p>\n\n\n\n

Prior to default, an economically viable company may retain an operating business, customer base, technologies, productive assets, and enterprise value, while a liquidity shortage may be temporary in nature. After default, access to financing declines, the confidence of customers and suppliers deteriorates, the company may lose employees and the value of its operating assets, and the number of available restructuring options decreases. In this regard, one of the key questions for public AMCs is determining the point at which targeted intervention can prevent further destruction of value.<\/p>\n\n\n\n

At the same time, the proposed approach is based on the \u201cMarket First\u201d principle: public AMCs should complement the market rather than replace it. First and foremost, restructuring should be carried out using existing market mechanisms and private capital\u2014including banks, private AMCs, distressed-asset investors, and capital-market instruments. The role of a public institution may arise where objective market gaps remain: difficulties in coordinating multiple creditors, information asymmetry, a lack of temporary financing, high perceived risk, or other factors preventing a market-based solution to the problem.<\/p>\n\n\n\n

Under such a model, the potential role of a permanent public AMC becomes broader than the traditional acquisition and subsequent disposal of NPLs. It may include identifying viable companies experiencing temporary financial difficulties, coordinating creditors, restructuring debt and assets, preserving operational activities, and attracting private capital. The ultimate objective is to return the restored company to normal market financing, rather than leaving it permanently dependent on government support.<\/p>\n\n\n\n

A practical example of such institutional evolution is the experience of KAMCO. In 1997, in response to a systemic financial crisis, the NPL Resolution Fund was established with a volume of KRW 39.2 trillion, followed in 2009, during the global financial crisis, by the Restructuring Fund with a volume of KRW 6.2 trillion. Subsequently, KAMCO\u2019s toolkit gradually expanded beyond traditional NPL management: programs to support corporate assets and rehabilitate companies, corporate financing instruments, restructuring funds, and mechanisms for cooperation with the capital market were introduced. Thus, KAMCO\u2019s functional trajectory evolved from crisis resolution and NPL management to corporate restructuring, financing, and interaction with the private capital market.<\/p>\n\n\n\n

Today, KAMCO\u2019s corporate support ecosystem brings together several groups of instruments. The first is related to financing and debt restructuring and includes DIP financing, corporate recovery programs, the acquisition of claims as part of rehabilitation proceedings, and guarantees for secured bonds. The second direction involves mobilizing private capital through corporate restructuring and support funds. The third is aimed at preserving productive assets, including through sale-and-leaseback mechanisms, under which a company obtains liquidity by selling an asset while continuing to use it in its operations.<\/p>\n\n\n\n

The model presented by KAMCO envisages the sequential use of these instruments at different stages of corporate financial difficulties. First, the company is provided with the liquidity necessary to stabilize operations and conduct restructuring negotiations. The debt and asset structure is then adjusted, the business\u2019s operational capacity is preserved, private capital is attracted, and the final stage is the company\u2019s return to bank or market financing. In this model, government capital is viewed as a catalyst that should initiate the recovery process and attract private funds, after which the government\u2019s direct role is reduced.<\/p>\n\n\n\n

One of the key conclusions of the presentation was that the role of AMCs continues to evolve alongside the development of financial systems and markets. If historically such institutions were established primarily to overcome the consequences of financial crises and subsequently focused on systematic work with NPLs, the next stage of their development could be earlier engagement with corporate financial difficulties, before a non-performing loan arises.<\/p>\n\n\n\n

At the same time, this approach does not imply an automatic expansion of government intervention. As emphasized in the presentation, public AMCs should act selectively, where genuine gaps in financing or coordination exist that the private market is unable to address effectively. In this regard, KAMCO\u2019s experience is viewed not as a universal model for other countries, but as a practical example of how the mandate and instruments of a permanent AMC can gradually adapt to new economic challenges. Looking ahead, the value of such institutions may lie not only in resolving NPLs that have already emerged, but also in preserving viable enterprises before temporary financial difficulties lead them to default.<\/p>\n","protected":false},"excerpt":{"rendered":"

From NPL Management to Early Restructuring: The New Role of Public Asset Management Companies As part of the 10th International Conference of the International Public Asset Management Companies Forum (IPAF) in Astana, organized by the Fund jointly with the Asian Development Bank, the second session, \u201cAMCs for the Next Decade: From Crisis Response to Market Catalyst for NPL Resolution,\u201d was held. The session focused on the transformation of the role of public asset management companies (AMCs) and possible directions for their development amid changing financial markets. The session\u2019s keynote presentation, \u201cThe Evolution of Asset Management Companies: From NPL Resolution to Early Corporate Restructuring,\u201d was delivered by Minjae Song, Team Leader, International Cooperation Department Korea Asset Management Company (KAMCO). The central topic of the presentation was whether the role of public AMCs should be limited to dealing with already established non-performing loans, or whether their accumulated institutional experience enables them to participate in addressing corporate financial difficulties at an earlier stage. The presentation demonstrated the evolution of AMC models over recent decades. In the 1990s, such organizations were primarily established as temporary instruments for responding to systemic financial crises: they acquired significant volumes of NPLs and contributed to the rapid clean-up of banks\u2019 balance sheets. In the 2000s, the model of permanent public AMCs developed, with institutional capacity for continuous work with distressed assets and for carrying out tasks related to maintaining financial stability. In subsequent years, market-based and hybrid models became more actively developed, involving private capital participation, investments in distressed assets, and market-based restructuring mechanisms. At the same time, as the speaker noted, there is no universal AMC model. The choice of institutional structure depends on the characteristics of a country\u2019s financial system, the maturity of its market, and the objectives set by the government. Crisis-response AMCs, permanent public organizations, and hybrid market-oriented structures differ in terms of their mandates, the degree of private capital participation, and the range of available instruments. Thus, the issue is not about choosing a single \u201cbest\u201d model, but about adapting the AMC institution to specific economic conditions. One of the central questions of the presentation was the possibility of further evolution of permanent public AMCs, from responding to NPLs that have already emerged to addressing corporate financial difficulties at an earlier stage. The traditional model assumes that a company goes through financial difficulties and default, the loan acquires non-performing status, after which the AMC acquires and manages the distressed asset. An alternative approach involves identifying financial problems earlier, carrying out restructuring, and, where necessary, providing temporary financing before a viable company reaches a state of default. The presentation emphasized that a company\u2019s financial difficulties generally develop gradually. As its condition deteriorates, access to market financing declines, the value of the business decreases, the probability of default increases, and at the same time the range of available restructuring instruments narrows. Therefore, the timing of intervention is of fundamental importance: at an early stage, a viable company retains more opportunities for recovery, whereas after default, the loss of value may accelerate significantly. Prior to default, an economically viable company may retain an operating business, customer base, technologies, productive assets, and enterprise value, while a liquidity shortage may be temporary in nature. After default, access to financing declines, the confidence of customers and suppliers deteriorates, the company may lose employees and the value of its operating assets, and the number of available restructuring options decreases. In this regard, one of the key questions for public AMCs is determining the point at which targeted intervention can prevent further destruction of value. At the same time, the proposed approach is based on the \u201cMarket First\u201d principle: public AMCs should complement the market rather than replace it. First and foremost, restructuring should be carried out using existing market mechanisms and private capital\u2014including banks, private AMCs, distressed-asset investors, and capital-market instruments. The role of a public institution may arise where objective market gaps remain: difficulties in coordinating multiple creditors, information asymmetry, a lack of temporary financing, high perceived risk, or other factors preventing a market-based solution to the problem. Under such a model, the potential role of a permanent public AMC becomes broader than the traditional acquisition and subsequent disposal of NPLs. It may include identifying viable companies experiencing temporary financial difficulties, coordinating creditors, restructuring debt and assets, preserving operational activities, and attracting private capital. The ultimate objective is to return the restored company to normal market financing, rather than leaving it permanently dependent on government support. A practical example of such institutional evolution is the experience of KAMCO. In 1997, in response to a systemic financial crisis, the NPL Resolution Fund was established with a volume of KRW 39.2 trillion, followed in 2009, during the global financial crisis, by the Restructuring Fund with a volume of KRW 6.2 trillion. Subsequently, KAMCO\u2019s toolkit gradually expanded beyond traditional NPL management: programs to support corporate assets and rehabilitate companies, corporate financing instruments, restructuring funds, and mechanisms for cooperation with the capital market were introduced. Thus, KAMCO\u2019s functional trajectory evolved from crisis resolution and NPL management to corporate restructuring, financing, and interaction with the private capital market. Today, KAMCO\u2019s corporate support ecosystem brings together several groups of instruments. The first is related to financing and debt restructuring and includes DIP financing, corporate recovery programs, the acquisition of claims as part of rehabilitation proceedings, and guarantees for secured bonds. The second direction involves mobilizing private capital through corporate restructuring and support funds. The third is aimed at preserving productive assets, including through sale-and-leaseback mechanisms, under which a company obtains liquidity by selling an asset while continuing to use it in its operations. The model presented by KAMCO envisages the sequential use of these instruments at different stages of corporate financial difficulties. First, the company is provided with the liquidity necessary to stabilize operations and conduct restructuring negotiations. The debt and asset structure is then adjusted, the business\u2019s operational capacity is preserved, private capital is attracted, and the final stage is the company\u2019s return<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[908],"tags":[],"class_list":["post-16988","post","type-post","status-publish","format-standard","hentry","category-international-relations-en"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":8}},"rttpg_featured_image_url":null,"rttpg_author":{"display_name":"eugene","author_link":"https:\/\/fpl.kz\/?author=1"},"rttpg_comment":0,"rttpg_category":"International relations<\/a>","rttpg_excerpt":"From NPL Management to Early Restructuring: The New Role of Public Asset Management Companies As part of the 10th International Conference of the International Public Asset Management Companies Forum (IPAF) in Astana, organized by the Fund jointly with the Asian Development Bank, the second session, \u201cAMCs for the Next Decade: From Crisis Response to Market…","_links":{"self":[{"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/posts\/16988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fpl.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16988"}],"version-history":[{"count":1,"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/posts\/16988\/revisions"}],"predecessor-version":[{"id":16989,"href":"https:\/\/fpl.kz\/index.php?rest_route=\/wp\/v2\/posts\/16988\/revisions\/16989"}],"wp:attachment":[{"href":"https:\/\/fpl.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fpl.kz\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fpl.kz\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}