UK-based Baring Asset Management has signed an in-principle agreement to acquire SEI Asset Korea, with the deal expected to go through by the end of this year, pending regulatory approval.
The Korean house has $6.3 billion in AUM and 47 staff, of whom 23 are investment professionals. Its management structure will be kept intact and the firm will be merged into Barings Korea Ltd, which the UK manager established over two years ago and has just two staff.
Once completed, Barings’ Korea office will be run by Thae Surn Khwarg, current chief executive of SEI Asset Korea.
This transaction will add materially to Barings’ AUM in Asia, which prior to this announcement stood at around $11 billion out of a global asset base of $47 billion. It has 505 staff in total.
Ian Pascal, London-based head of marketing and communications at Barings, tells AsianInvestor: “The transaction was an opportunity to make a step-change in terms of our distribution in Korea.
“SEI AK has licences to distribute institutional and retail products there, and we will look to bring our international products and investment skills to distribute more widely in the country. We believe we can help grow this business more rapidly.”
SEI AK has a range of equity and fixed income products at the core of its domestic offering, and these will be rebranded once the transaction is completed.
Barings does have a UK-domiciled Korea unit trust with a feeder fund for the international market run out of Hong Kong and registered globally. Pascal estimates the strategy has $350 million.
Financial details of the transaction remain undisclosed, and he declines to be drawn on whether Barings was in discussions with parties other than SEI AK about a potential acquisition.
However, he says Barings chose acquisition as the fastest way to accelerate its expansion plans in Korea, a market that he notes is the third largest for asset management services in the region.
Pascal points to growing appetite for global risk assets from a long-term perspective in Korea as a diversification from the domestic market, and sees Barings’ high-yield global bond product as one distribution option.
“Korea is a large asset management market and it is growing rapidly,” he adds. “We believe it will continue to do so in the long term, so it makes sound sense to expand our presence there.”
Barings also has an Asian presence in Japan, Hong Kong and Taiwan, but Pascal indicates that the firm has no further acquisition plans at present.
SEI AK is the 19th largest firm out of 82 asset managers registered in Korea, according to a Barings statement. It was founded in 1988 as Tong Yang Investment Advisory and merged with Asset Korea in 1997.