Goldman Sachs Asset Management has agreed to wholly acquired Macquarie-IMM Investment Management in South Korea, giving the player an onshore funds business.

Macquarie-IMM, which is 65% owned by Macquarie and 35% owned by IMM & Co., grew as a fund manager oriented toward fixed income. But, says CEO Jae Lee, the firm has reinvented itself in the past 18 months as a provider of alternative asset classes to the local retail market.

ôWe have won big retail mandates for global and Asia real-estate investment trusts and infrastructure funds,ö Lee says. These products have brought in W4.5 trillion ($5.1 billion) in the past year, and now comprise nearly half the firm's total W10 trillion ($11.3 billion) of assets under management.

Pricing details of the acquisition were not disclosed.

ôWe've taken a leadership role in introducing these products to Korean retail investors,ö Lee says, noting the firm realised that demand for fixed-income funds - always a low-margin business - had long since tailed off, and that demand for Bric or emerging-market funds had cooled since last summer's market volatility.

Goldman is expected to broaden the range of product, introducing the full stable of its offshore investments. A spokesman at GSAM in Seoul says the firm will retain Lee as CEO and all 38 staff, including marketing, client service and investment teams for Korean equities and fixed income. In turn the firm will bring its global product range and risk management capabilities. Lee will now report to Oliver Bolitho, head of GSAM for Asia ex-Japan in Hong Kong. GSAM manages $627 billion worldwide.

Macquarie has no immediate plans to reincarnate its onshore mutual funds business. But it continues to manage infrastructure funds through the bank's own asset management unit, and will continue to sub-advise products for Macquarie-IMM and Shinhan BNP Paribas Asset Management. It also will continue to offer infrastructure and Reit funds, in both listed and private opportunities, to both retail and institutional investors, says a Macquarie spokeswoman.