“No results, no fees. We share the responsibility with our investors.”
Documents neatly arranged on the table. Beyond them, Lee Ho-seung, CEO of Piper Republic, continues speaking in a firm tone.
He, whom we met in a conference room at a shared office in Tehran-ro, Seoul, poured out his weighty story as if he had no need for any fancy production.
From a securities analyst to a fund manager at an asset management company, and now a designer of an investment platform that connects private equity funds to individuals. Looking at his resume, he seems like someone who has done a lot of things, but he says he has been on one path from the beginning.
“Information, quality assets, and structures that institutions enjoy. Why on earth can’t individuals benefit from them?” This wasn’t just a casual remark. It was a real sense of problem that led to structural innovation.
Real reality seen on site
CEO Lee Ho-seung, who started out as an analyst at KDB Daewoo Securities, lived for the ‘fun of dissecting companies with numbers.’ It was no coincidence that he moved to Mirae Asset Global Investments. He wanted to directly manage the Ministry of Land, Infrastructure and Transport’s Housing and Urban Development Fund.
“When I first got into commercial real estate, I realized two things for sure.”
The first is the information wall. “Investment information was too limited. Data asymmetry was so severe that it was very difficult to obtain even one piece of information I needed.”
The second realization: “I realized that commercial real estate is a perfect fit for individual investors. It has predictable cash flow and relatively low risk. But individuals don’t even have access to this great product.”
The problem was the distribution structure. “From unnecessary middlemen to complicated procedures. I knew that if I didn’t change this structure, truly good products would never reach investors.” That was when I started thinking about overturning the distribution structure with technology.
Piece investment? We are different
This is a common misconception people have when explaining Piper Republic. It is a real estate piece investment platform. CEO Lee Ho-seung shook his head.
“The piece investment platform is an ‘innovation in investment methods.’ We are an ‘innovation in investment products.’ Piece investment is based on the exchange, allowing individuals to easily buy and sell. We allow small amounts of money and joint investments in excellent products that pension funds invest in.”
Piper Republic's structure is a medium- to long-term holding type. There is no middleman, and it focuses on essential profits such as rental income and capital gains. An innovative fee structure is added to this.
“If there is no performance, we have no profit. It is a structure that completely aligns the interests of investors and us. I think this is true investor-centered finance.”
92% accuracy, differentiation proven by technology
Where does confidence come from? The answer lies in ‘Realistics’, an AI analysis engine that contains everything about commercial real estate.
“We have accumulated over 2,000 asset data, and we received a 92% prediction reliability in a public institution test. We were also selected for the Ministry of Science and ICT (now the Ministry of SMEs and Startups) R&D project.”
Rent, vacancy rate, and tenant information are basic, and we analyze floating population and ESG indicators. “Rental data is the most essential information in commercial real estate, but it has been difficult to obtain. We obtained it through comprehensive surveys and platforms.”
It’s not just about techies. He emphasizes that all of this is for investors. “We visualized the investment prospectus that was difficult for individual investors to understand, so that anyone can easily make decisions.”
The most radical change is the commission. “We set the commission that financial institutions used to charge over 10% to zero. This is a true financial innovation created by fintech technology.”
Instead, a performance-based compensation system was introduced. “We eliminated the general brokerage fee and only received a portion of the performance fee when investors made a profit. If investors lose money, we don’t receive a penny either.”
The thirst of the market that speaks of 65.3 billion
The market response was hot. In the beta service alone, 3,000 people invested 65.3 billion won. “We have over 15,000 app users before the official launch. That means there are many people who are thirsty for stable investments.”
Partnerships are also solid. He explained, “We have signed business agreements with eight of the top-tier Ritz AMCs in Korea and are also working with Hana Securities. We are preparing to take a leap forward as a financial platform.”
The goal is to secure 50,000 investors within this year.
When asked how it is different from existing investment products, CEO Lee Ho-seung answered clearly.
“The real estate mutual fund market is almost dead now. There are almost no new products being created. Looking at past cases, the marketability is significantly lower than pension products, so our products have an absolute advantage.”
The difference with listed REITs is more obvious. “Listed REITs are in the form of a portfolio, so they often contain assets that I don’t want, and in many cases, capital gains from sales are not reflected in dividends. We share rental income as well as sales income with investors.”
Risk? Just show it transparently.
Investing naturally involves risk. However, CEO Lee Ho-seung’s approach is different.
“It’s natural to take risks when investing. The problem is that you don’t have information about those risks. That’s an incomplete sale.”
The solution is transparency of information. “We provide asset analysis information through the RSM analysis engine and visualize complex investment prospectuses. Anyone can easily understand and make decisions.”
It also has a pre-risk monitoring system. He introduced it as “a system that actively protects investors’ right to know by monitoring financial, economic, and real estate market trends in real time and informing investors in advance.”
CEO Lee Ho-seung’s ultimate goal is clear. “We are a digital native securities company centered on individual investors. Zero commissions and maximum investor convenience are the basics, and providing the most stable investment products is the reason we exist.”
His voice was filled with confidence when he was asked to draw a picture of five years from now. “We will create a world where no investor is left out. For a transparent and sound investment market. If good investment products continue to come out, I think it is only a matter of time before we enter the market as an unprecedented mobile securities company.”
Realitics is also a must. “We are trying to make the commercial real estate industry, which is particularly closed to information, transparent. It is a world where anyone, whether an institution or an individual, can easily access investment information.”
As he left the conference room, his last words were impressive. “Transparency of information, honesty of products, and investor protection. If these three are deeply rooted, we will expand beyond the securities industry.”
In the end, it was 'authority'. A market that gave real authority back to investors. This was called the 'Republic of Investors'. It was to make the world of investment, which was previously seen through cracks in the door, now accessible through the main entrance. This is the innovation that Piper Republic dreams of.
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